— Second Quarter Revenues of $151.4 Million and
Non-GAAP Diluted Loss Per Share of $0.09 —
— Alkermes Unveils ARISTADA™ as Proposed Brand
Name for Aripiprazole Lauroxil;Final Launch Preparations Underway
in Advance of Aug. 22, 2015 PDUFA Date —
— Company Improves Financial Expectations for
2015 Driven by Strong VIVITROL® Performance —
Alkermes plc (NASDAQ: ALKS) today reported financial results for
the second quarter of 2015.
“With the PDUFA date for ARISTADA™, our proposed brand name for
aripiprazole lauroxil, just a few weeks away, we are in the midst
of final launch preparations for this important potential new
treatment option for patients with schizophrenia. Our field sales
force is in position, our comprehensive patient support services
are ready and launch quantities have been manufactured,” said
Richard Pops, Chief Executive Officer of Alkermes. “ARISTADA, our
long-acting atypical antipsychotic product candidate for
schizophrenia, is leading the next wave of Alkermes’ emerging
blockbusters that offer innovative treatment options for chronic
CNS diseases that affect millions of people. Our late-stage
pipeline of product candidates, including ALKS 5461 in depression,
ALKS 3831 in schizophrenia, and ALKS 8700 in multiple sclerosis,
has been purposefully designed to address areas of major unmet
medical need and to be responsive to today’s regulatory and payer
environments.”
“Our second quarter financial results were driven by the strong
revenues from our core portfolio of commercial products, important
investments in the development of our late-stage CNS pipeline and
the launch preparations for ARISTADA,” commented James Frates,
Chief Financial Officer of Alkermes. “Today we are improving our
financial expectations for the remainder of 2015, driven by the
accelerating quarterly growth in net sales of VIVITROL®, our
long-acting injectable medication for the treatment of opioid
dependence and alcohol dependence.”
Quarter Ended June 30, 2015
Highlights
- Total revenues for the quarter were
$151.4 million compared to $153.4 million for the same period in
the prior year. The prior year period included $21.1 million of
revenues from the products associated with the Gainesville
manufacturing facility that was divested in April 2015.
- Net loss according to generally
accepted accounting principles in the U.S. (GAAP) was $46.1
million, or a basic and diluted GAAP loss per share of $0.31, for
the quarter. This compared to GAAP net income of $3.7 million, or a
basic GAAP earnings per share (EPS) of $0.03 and a diluted GAAP EPS
of $0.02, for the same period in the prior year, which included
GAAP net income of $7.3 million related to the Gainesville facility
and associated products and $27.6 million of net income from two
one-time transactions.
- Non-GAAP net loss was $13.6 million, or
a non-GAAP diluted loss per share of $0.09 for the quarter. This
compared to non-GAAP net income of $17.7 million, or a non-GAAP
diluted EPS of $0.11, for the same period in the prior year, which
included non-GAAP net income of $10.6 million related to the
Gainesville facility and associated products.
- On April 10, 2015, Alkermes closed the
transaction to divest its Gainesville, Ga. facility and associated
products, as well as rights to IV/IM and parenteral forms of
Meloxicam (Meloxicam), to Recro Pharma, Inc. (Recro) in exchange
for gross proceeds of $54 million and future payments related to
Meloxicam, including milestone payments of up to $120 million and
low double-digit royalties on net sales. Alkermes recorded a gain
on this transaction of $9.9 million during the second quarter,
which was recorded as a component of other income, net.
Quarter Ended June 30, 2015 Financial
Results
Revenues
- Manufacturing and royalty revenues from
the company’s long-acting atypical antipsychotic franchise,
RISPERDAL® CONSTA® and INVEGA® SUSTENNA®/XEPLION®, were $60.8
million, compared to $60.0 million for the same period in the prior
year.
- Manufacturing and royalty revenues from
AMPYRA®/FAMPYRA®1 were $26.9 million, compared to $19.5 million for
the same period in the prior year.
- Net sales of VIVITROL were $37.2
million, compared to $21.6 million for the same period in the prior
year, representing an increase of approximately 72%.
- Royalty revenue from BYDUREON® was
$11.1 million, compared to $8.8 million for the same period in the
prior year.
Costs and Expenses
- Operating expenses were $203.9 million,
reflecting increased investment in the company’s rapidly advancing
central nervous system (CNS) development pipeline and pre-launch
activities for ARISTADA. This compared to $176.2 million for the
same period in the prior year, which included $13.2 million related
to the Gainesville facility and associated products.
- Income tax provision was $3.1 million,
compared to an income tax benefit of $1.5 million for the same
period in the prior year.
Balance Sheet
At June 30, 2015, Alkermes had cash and total investments of
$832.4 million, compared to $801.6 million at Dec. 31, 2014. At
June 30, 2015, the company’s total debt outstanding was $354.8
million.
Financial Expectations
Alkermes is updating its financial expectations for 2015 as a
result of accelerating growth trends for VIVITROL, which are
driving a $10 million increase in expected revenues and $8 million
improvement in expected non-GAAP net loss. The following outlines
Alkermes’ updated financial expectations for 2015.
- Revenues: Alkermes now expects
total revenues to range from $610 million to $640 million, up from
the previous range of $600 million to $630 million.
- Alkermes now expects VIVITROL net sales
to range from $135 million to $145 million, up from a previous
range of $125 million to $135 million.
- The company continues to expect net
sales from the anticipated launch of ARISTADA to range from $5
million to $10 million.
- Cost of Goods Manufactured and
Sold: The company continues to expect cost of goods
manufactured and sold to range from $130 million to $140
million.
- R&D Expenses: The company
continues to expect R&D expenses to range from $345 million to
$365 million.
- Selling, General and Administrative
(SG&A) Expenses: The company continues to expect SG&A
expenses to range from $310 million to $330 million.
- Amortization of Intangible
Assets: The company now expects amortization of intangible
assets of approximately $60 million, reduced from the previous
expectation of approximately $65 million.
- Net Interest Expense: The
company continues to expect net interest expense to range from $10
million to $15 million.
- Other Income, Net: The company
now expects other income, net to range from $10 million to $15
million, driven primarily by the gain on the sale of the
Gainesville facility and associated products during the second
quarter and changes in the fair value of the contingent
consideration and warrants received as part of the
transaction.
- Net Income Tax Expense: The
company continues to expect net income tax expense to range from
$10 million to $15 million.
- GAAP Net Loss: The company now
expects GAAP net loss to range from $245 million to $270 million,
or a basic and diluted loss per share of $1.63 to $1.80, based on
weighted average basic and diluted share counts of approximately
150 million shares outstanding. This compares to previous
expectations of GAAP net loss in the range of $270 million to $300
million, or a basic and diluted loss per share of approximately
$1.80 to $2.00, based on weighted average basic and diluted share
counts of approximately 150 million shares outstanding.
- Non-GAAP Net Loss: The company
now expects non-GAAP net loss to range from $47 million to $67
million, or a basic and diluted loss per share of $0.31 to $0.45,
based on weighted average basic and diluted share counts of
approximately 150 million shares outstanding. This compares to
previous expectations of non-GAAP net loss in the range of $55
million to $75 million, or a non-GAAP diluted loss per share of
$0.37 to $0.50, based on a weighted average diluted share count of
approximately 150 million shares outstanding.
- Capital Expenditures: The
company continues to expect capital expenditures to be
approximately $50 million.
- Free Cash Outflow: The company
now expects free cash outflow to range from $97 million to $117
million. This compares to previous expectations of free cash
outflow in the range of $105 million to $125 million.
Conference Call
Alkermes will host a conference call at 8:30 a.m. EDT (1:30 p.m.
BST) on Thursday, July 30, 2015, 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 11:00 a.m. EDT (4:00 p.m. BST) on Thursday, July 30,
2015, through 5:00 p.m. EDT (10:00 p.m. BST) on Thursday, August 6,
2015, 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
Alkermes plc is a fully integrated, global
biopharmaceutical company developing innovative medicines for the
treatment of central nervous system (CNS) diseases. The company has
a diversified commercial product portfolio and a substantial
clinical pipeline of product candidates for chronic diseases that
include schizophrenia, depression, addiction and multiple
sclerosis. 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 generally
accepted accounting principles in the U.S. (GAAP), including
non-GAAP net income or loss, non-GAAP diluted earnings or loss 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 or 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; non-cash tax expense; deferred
revenue; and certain other one-time or non-cash items.
- Free cash flow represents non-GAAP net
income or loss less capital expenditures.
The company’s management believes that these non-GAAP financial
measures, when viewed with the company’s results under GAAP and the
accompanying reconciliations, better indicate underlying trends in
ongoing operations and cash flows. However, non-GAAP net income or
loss, non-GAAP diluted earnings or loss 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 development
activities, including regulatory approval of ARISTADA (aripiprazole
lauroxil) and advancement of the company’s product candidates. The
company cautions that forward-looking statements are inherently
uncertain. Although the company believes that such statements are
based on reasonable assumptions within the bounds of its knowledge
of its business and operations, 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:
clinical development activities may not be completed on time or at
all and the results of such activities may not be 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 partners, may not be able to continue
to successfully commercialize its 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 U.S. Food and Drug Administration 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 “Item 1A. Risk
Factors” in the company’s Annual Report on Form 10-K for the fiscal
year ended Dec. 31, 2014, under the heading “Item 1A. Risk
Factors” in the company’s Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 2015, and in any other
subsequent filings made by the company with the 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 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 or
revising any forward-looking information contained in this press
release.
ARISTADA™ is a trademark of Alkermes Pharma Ireland Limited;
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.
1AMPYRA® (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 International GmbH, under a licensing
agreement with Acorda Therapeutics, Inc., as FAMPYRA®
(prolonged-release fampridine tablets).
Alkermes plc and
SubsidiariesSelected Financial Information
(Unaudited)
Three Months
Three Months Ended Ended
Condensed Consolidated Statements of
Operations - GAAP June 30, June 30,
(In thousands, except
per share data) 2015 2014 Revenues: Manufacturing and royalty
revenues $ 113,162 $ 130,366 Product sales, net 37,172 21,595
Research and development revenues 1,036 1,463 Total
Revenues 151,370 153,424 Expenses: Cost of goods
manufactured and sold 30,418 43,290 Research and development 87,882
67,207 Selling, general and administrative 71,539 50,663
Amortization of acquired intangible assets 14,052 15,089
Total Expenses 203,891 176,249 Operating Loss
(52,521 ) (22,825 ) Other Income, net: Interest income 795 323
Interest expense (3,315 ) (3,385 ) Gain on Gainesville Transaction
9,911 - Increase in the fair value of contingent consideration
1,500 - Gain on sale of property, plant and equipment - 12,285
Other income, net 585 518 Gain on sale of investment in Acceleron
Pharma Inc. - 15,296 Total Other Income, net 9,476
25,037 (Loss) Income Before Income Taxes (43,045 )
2,212 Income Tax Provision (Benefit) 3,064 (1,523 )
Net (Loss) Income — GAAP $ (46,109 ) $ 3,735
(Loss) Earnings Per Share: GAAP (loss) earnings per share —
basic $ (0.31 ) $ 0.03 GAAP (loss) earnings per share —
diluted $ (0.31 ) $ 0.02 Non-GAAP (loss) earnings per share
— basic $ (0.09 ) $ 0.12 Non-GAAP (loss) earnings per share
— diluted $ (0.09 ) $ 0.11
Weighted Average Number
of Ordinary Shares Outstanding: Basic — GAAP 148,867
144,913 Diluted — GAAP 148,867 154,300 Basic —
Non-GAAP 148,867 144,140 Diluted — Non-GAAP 148,867
153,833 An itemized reconciliation between net
(loss) income on a GAAP basis and non-GAAP net (loss) income is as
follows:
Net (Loss) Income — GAAP $ (46,109 ) $ 3,735
Adjustments: Share-based compensation expense 21,877 19,337
Amortization expense 14,052 15,089 Depreciation expense 6,584 9,844
Non-cash net interest expense 235 239 Non-cash taxes 3,034 (2,207 )
Deferred revenue (574 ) (338 ) Net loss on transactions with equity
method investee (397 ) (396 ) Gain on Gainesville Transaction
(9,911 ) - Increase in the fair value of contingent consideration
(1,500 ) - Change in the fair value of common stock warrants (876 )
- Gain on sale of investment in Acceleron Pharma Inc. - (15,296 )
Gain on sale of property, plant and equipment - (12,285 )
Non-GAAP Net (Loss) Income $ (13,585 ) $ 17,722 Capital
expenditures 14,046 5,753
Free Cash (Outflow)
Inflow $ (27,631 ) $ 11,969
Six Months
Six Months Ended Ended
Condensed Consolidated Statements of
Operations - GAAP June 30, June 30,
(In thousands, except
per share data) 2015 2014 Revenues: Manufacturing and royalty
revenues $ 241,906 $ 241,646 Product sales, net 68,309 38,674
Research and development revenues 2,369 3,316 Total
Revenues 312,584 283,636 Expenses: Cost of goods
manufactured and sold 70,392 82,129 Research and development
158,160 119,347 Selling, general and administrative 134,589 93,213
Amortization of acquired intangible assets 29,272 27,665
Total Expenses 392,413 322,354
Operating Loss (79,829 ) (38,718 ) Other Income, net:
Interest income 1,455 834 Interest expense (6,603 ) (6,741 ) Gain
on Gainesville Transaction 9,911 - Increase in the fair value of
contingent consideration 1,500 - Gain on sale of property, plant
and equipment - 12,285 Other income (expense), net 374 (1,332 )
Gain on sale of investment in Acceleron Pharma Inc. - 15,296
Total Other Income, net 6,637 20,342 Loss
Before Income Taxes (73,192 ) (18,376 ) Income Tax Provision 3,574
2,243
Net Loss — GAAP $ (76,766 ) $ (20,619 )
(Loss) Earnings Per Share: GAAP loss per share —
basic $ (0.52 ) $ (0.14 ) GAAP loss per share — diluted $ (0.52 ) $
(0.14 ) Non-GAAP (loss) earnings per share — basic $ (0.03 ) $ 0.24
Non-GAAP (loss) earnings per share — diluted $ (0.03 ) $
0.22
Weighted Average Number of Ordinary Shares
Outstanding: Basic — GAAP 148,480 144,140 Diluted
— GAAP 148,480 144,140 Basic — Non-GAAP 148,480
144,140 Diluted — Non-GAAP 148,480 153,833
An itemized reconciliation between net loss on a GAAP
basis and non-GAAP net (loss) income is as follows:
Net Loss —
GAAP $ (76,766 ) $ (20,619 ) Adjustments: Share-based
compensation expense 39,206 32,757 Amortization expense 29,272
27,665 Depreciation expense 13,850 19,821 Non-cash net interest
expense 471 479 Non-cash taxes 3,522 1,415 Deferred revenue (902 )
(1,303 ) Net loss on transactions with equity method investee (794
) 1,239 Gain on Gainesville Transaction (9,911 ) - Increase in the
fair value of contingent consideration (1,500 ) - Change in the
fair value of common stock warrants (876 ) - Gain on sale of
investment in Acceleron Pharma Inc. - (15,296 ) Gain on sale of
property, plant and equipment - (12,285 )
Non-GAAP Net
(Loss) Income $ (4,428 ) $ 33,873 Capital expenditures 24,756
11,438
Free Cash (Outflow) Inflow $ (29,184 )
$ 22,435
Condensed Consolidated Balance Sheets June 30, December 31,
(In thousands) 2015 2014 Cash, cash equivalents and total
investments $ 832,358 $ 801,646 Receivables 135,783 151,551
Inventory 38,801 51,357 Prepaid expenses and other current assets
65,279 42,719 Property, plant and equipment, net 239,258 265,740
Intangible assets, net and goodwill 500,472 573,624 Contingent
consideration 59,100 - Other assets 43,460 34,635
Total
Assets $ 1,914,511 $ 1,921,272 Long-term debt — current portion
$ 6,750 $ 6,750 Other current liabilities 127,468 123,832 Long-term
debt 348,056 351,220 Deferred revenue — long-term 7,805 11,801
Other long-term liabilities 25,441 30,832 Total shareholders'
equity 1,398,991 1,396,837
Total Liabilities and Shareholders'
Equity $ 1,914,511 $ 1,921,272 Ordinary shares
outstanding (in thousands) 149,304 147,539
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 and six months ended
June 30, 2015, which the company intends to file in July 2015.
Alkermes plc and
Subsidiaries2015 Guidance — GAAP to Non-GAAP
Adjustments
An itemized
reconciliation between projected loss per share on a GAAP basis and
projected loss per share on a non-GAAP basis is as follows:
(In millions, except per share data)
Amount Shares Loss Per
Share
Projected Net Loss — GAAP $ (257.5 ) 150 $ (1.72 )
Adjustments: Non-cash net interest expense 1.0 Non-cash taxes 10.0
Depreciation expense 35.0 Amortization expense 60.0 Share-based
compensation expense 110.0 Gain on Gainesville Transaction (10.0 )
Change in fair value of contingent consideration and warrants (2.5
) Deferred revenue (3.0 )
Projected Non-GAAP Net Loss
$ (57.0 ) 150 $ (0.38 ) Capital expenditures 50.0
Projected Free Cash Outflow $ (107.0 )
Projected GAAP and non-GAAP measures reflect mid-points within
ranges of estimated guidance.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150730005222/en/
Alkermes Contacts:For
Investors:Rebecca Peterson, +1-781-609-6378orFor Media:Jennifer
Snyder, +1-781-609-6166
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