— Third Quarter Revenues Increased 18%
Year-Over-Year to $180.2 Million;GAAP Loss per Share of $0.41 and
Non-GAAP Loss per Share of $0.09 —
— VIVITROL® Net Sales Grew 47% Year-Over-Year
to $55.8 Million —
— ARISTADA® Launch Progressing; Revenues Grow
In Line With Expectations —
Alkermes plc (NASDAQ: ALKS) today reported financial results for
the third quarter of 2016.
“Our third quarter results demonstrate the value of our
highly-diversified commercial portfolio, and were driven by the
strong growth of our proprietary products, VIVITROL® and
ARISTADA®,” commented James Frates, Chief Financial Officer of
Alkermes. “As we approach year-end, we remain well-positioned to
execute on our business strategy and are reiterating our 2016
financial expectations provided in July.”
“We are at an unprecedented place in Alkermes’ evolution, with
two proprietary products growing in their markets, ALKS 5461
advancing at full speed, and two additional late-stage candidates
well into their pivotal programs,” stated Richard Pops, Chief
Executive Officer of Alkermes. “VIVITROL for opioid and alcohol
dependence and ARISTADA for schizophrenia are important,
distinctive medicines in their disease areas and are the foundation
of our future growth. With the positive results of FORWARD-5 for
ALKS 5461 for major depressive disorder in hand, Alkermes’ next
potential growth driver is coming more clearly into focus.”
Quarter Ended Sept. 30, 2016
Highlights
- Total revenues for the quarter were
$180.2 million. This compared to $152.7 million for the same period
in the prior year.
- Net loss according to generally
accepted accounting principles in the U.S. (GAAP) was $62.7
million, or a basic and diluted GAAP loss per share of $0.41, for
the quarter, which reflected increased investment in the company’s
advancing late-stage pipeline and commercial infrastructure. This
compared to GAAP net loss of $81.0 million, or a basic and diluted
GAAP loss per share of $0.54, for the same period in the prior
year.
- Non-GAAP net loss was $14.1 million, or
a non-GAAP basic and diluted loss per share of $0.09, for the
quarter. This compared to non-GAAP net loss of $28.8 million, or a
non-GAAP basic and diluted loss per share of $0.19, for the same
period in the prior year.
Quarter Ended Sept. 30, 2016 Financial
Results
Revenues
- Net sales of VIVITROL were $55.8
million, compared to $37.9 million for the same period in the prior
year, representing an increase of approximately 47%.
- Net sales of ARISTADA were $14.0
million, up from $10.3 million in the second quarter of 2016.
- Manufacturing revenues from RISPERDAL
CONSTA® (risperidone) and royalty revenues from RISPERDAL CONSTA,
INVEGA SUSTENNA®/XEPLION® (paliperidone palmitate) and INVEGA
TRINZA®/TREVICTA® (paliperidone palmitate) were $73.3 million,
compared to $67.6 million for the same period in the prior
year.
- Manufacturing and royalty revenues from
AMPYRA®/FAMPYRA®1 were $12.9 million, compared to $22.1 million for
the same period in the prior year, primarily due to the timing of
manufacturing shipments.
- Royalty revenue from BYDUREON® was
$11.6 million, compared to $13.0 million for the same period in the
prior year.
Costs and Expenses
- Operating expenses were $241.4 million,
reflecting increased investment in the company’s development
pipeline, the continued launch of ARISTADA and growth of VIVITROL.
Operating expenses for the quarter ended Sept. 30, 2015 were $230.1
million.
Balance SheetAt Sept. 30, 2016,
Alkermes had cash and total investments of $624.6 million, compared
to $798.8 million at Dec. 31, 2015. On Sept. 26, 2016 the company
retired $60 million of maturing debt. In October 2016, the company
extended the maturity date of the approximately $286 million
outstanding term loan by two years to Sept. 25, 2021.
Financial
ExpectationsAlkermes reiterates its Financial
Expectations for 2016 set forth in its press release dated July 28,
2016.
Conference CallAlkermes will
host a conference call at 8:30 a.m. ET (12:30 p.m. GMT) on
Wednesday, Nov. 2, 2016, 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. ET (3:00 p.m. GMT) on Wednesday, Nov. 2,
2016, through 5:00 p.m. ET (10:00 p.m. GMT) on Wednesday, Nov. 9,
2016, 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 AlkermesAlkermes
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
MeasuresThis 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 (loss) and non-GAAP 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 loss in the three and nine months ended Sept. 30,
2016 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,
better indicate underlying trends in ongoing
operations. However, non-GAAP net income (loss) and non-GAAP
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
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
StatementsCertain 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:
future financial and operating performance, business plans or
prospects; the likelihood of revenue growth from the company’s
marketed products; the therapeutic and commercial value of the
company’s marketed and development products; and expectations
concerning the timing and results of clinical development
activities and regulatory authority interactions. 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: the
unfavorable outcome of litigation, including so-called
“Paragraph IV” litigation and other patent litigation, related
to any of our products; data from clinical trials may be
interpreted by the U.S. Food and Drug Administration (“FDA”) in
different ways than we interpret it; the FDA may not agree with our
regulatory approval strategies or components of our filings, such
as clinical trial designs; clinical development activities may not
be completed on time or at all; the results of such 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 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 company’s products may prove difficult to
manufacture, be precluded from commercialization by the proprietary
rights of third parties, or have unintended side effects, adverse
reactions or incidents of misuse; and those risks and uncertainties
described under the heading “Risk Factors” in the company’s Annual
Report on Form 10-K for the fiscal year ended Dec. 31, 2015, and in
any other subsequent filings made by the company with the U.S.
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 or revising any forward-looking
information contained in this press release.
VIVITROL® is a registered trademark of Alkermes, Inc.; ARISTADA®
is a registered trademark of Alkermes Pharma Ireland Limited;
RISPERDAL CONSTA®, INVEGA SUSTENNA®, XEPLION®, INVEGA TRINZA® and
TREVICTA® are registered trademarks of Johnson & Johnson and
its affiliates; 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 Idec, under a licensing agreement with
Acorda Therapeutics, as FAMPYRA® (prolonged-release fampridine
tablets).
(tables follow)
Alkermes plc and Subsidiaries
Selected Financial Information
(Unaudited)
Three Months Three Months Ended Ended
Condensed Consolidated Statements of
Operations - GAAP
September 30, September 30,
(In thousands, except per share
data)
2016 2015 Revenues: Manufacturing and royalty revenues $ 110,250 $
114,072 Product sales, net 69,802 37,903 Research and development
revenues 189 678 Total Revenues 180,241
152,653 Expenses: Cost of goods manufactured and sold 35,456
33,806 Research and development 99,444 92,558 Selling, general and
administrative 91,145 89,497 Amortization of acquired intangible
assets 15,323 14,207 Total Expenses 241,368
230,068 Operating Loss (61,127 ) (77,415 ) Other Expense,
net: Interest income 912 865 Interest expense (3,375 ) (3,325 )
Gain on Gainesville Transaction - 26 Change in the fair value of
contingent consideration (1,000 ) 1,200 Other (expense) income, net
(752 ) 629 Total Other Expense, net (4,215 ) (605 ) Loss
Before Income Taxes (65,342 ) (78,020 ) Income Tax (Benefit)
Provision (2,655 ) 2,995
Net Loss — GAAP $ (62,687 )
$ (81,015 )
Net Loss Per Share: GAAP net loss per
share — basic and diluted $ (0.41 ) $ (0.54 ) Non-GAAP net loss per
share — basic and diluted $ (0.09 ) $ (0.19 )
Weighted
Average Number of Ordinary Shares Outstanding: Basic and
diluted — GAAP and Non-GAAP 151,652 149,512 An
itemized reconciliation between net loss on a GAAP basis and
non-GAAP net loss is as follows:
Net Loss — GAAP $ (62,687 )
$ (81,015 ) Adjustments: Share-based compensation expense 23,726
35,267 Amortization expense 15,323 14,207 Depreciation expense
8,497 6,486 Income tax effect related to reconciling items (673 )
(2,344 ) Non-cash net interest expense 231 234 Loss (gain) on
warrants and equity method investments 521 (79 ) Change in the fair
value of contingent consideration 1,000 (1,200 ) Gain on
Gainesville Transaction - (26 ) Gain on sale of property, plant and
equipment - (341 )
Non-GAAP Net Loss $ (14,062 ) $
(28,811 ) Nine Months
Nine Months Ended Ended
Condensed Consolidated Statements of
Operations - GAAP September 30, September 30,
(In thousands,
except per share data) 2016 2015 Revenues: Manufacturing and
royalty revenues $ 353,444 $ 355,978 Product sales, net 176,695
106,212 Research and development revenues 2,042 3,047
Total Revenues 532,181 465,237 Expenses: Cost of
goods manufactured and sold 97,165 104,198 Research and development
297,523 250,718 Selling, general and administrative 276,985 224,086
Amortization of acquired intangible assets 45,636 43,479
Total Expenses 717,309 622,481 Operating Loss
(185,128 ) (157,244 ) Other (Expense) Income, net: Interest income
2,917 2,320 Interest expense (9,993 ) (9,928 ) Gain on Gainesville
Transaction - 9,937 Change in the fair value of contingent
consideration 3,100 2,700 Other (expense) income, net (970 ) 1,003
Total Other (Expense) Income, net (4,946 ) 6,032 Loss
Before Income Taxes (190,074 ) (151,212 ) Income Tax (Benefit)
Provision (2,771 ) 6,569
Net Loss — GAAP
$ (187,303 ) $ (157,781 )
Net Loss Per Share: GAAP
net loss per share — basic and diluted $ (1.24 ) $ (1.06 ) Non-GAAP
net loss per share — basic and diluted $ (0.22 ) $ (0.24 )
Weighted Average Number of Ordinary Shares Outstanding:
Basic and diluted — GAAP and Non-GAAP 151,261 148,828
An itemized reconciliation between net loss on a GAAP basis
and non-GAAP net loss is as follows:
Net Loss — GAAP $
(187,303 ) $ (157,781 ) Adjustments: Share-based compensation
expense 74,613 74,473 Amortization expense 45,636 43,479
Depreciation expense 23,972 20,336 Income tax effect related to
reconciling items 616 (2,204 ) Loss (gain) on warrants and equity
method investments 1,264 (1,749 ) Non-cash net interest expense 694
705 Upfront license option payment to Reset Therapeutics, Inc.
charged to R&D expense 10,000 - Change in the fair value of
contingent consideration (3,100 ) (2,700 ) Gain on Gainesville
Transaction - (9,937 ) Gain on sale of property, plant and
equipment - (455 )
Non-GAAP Net Loss $ (33,608 ) $
(35,833 )
Pursuant to compliance and disclosure interpretations published
by the SEC in May 2016, the Company made certain changes to how it
presents non-GAAP net loss. The Company no longer adjusts the
deferred revenue recognized in the period and now reflects the tax
effect of the reconciling items, as opposed to the non-cash taxes,
as was previously the case. The Company revised its prior period
presentation to reflect its current period presentation.
Condensed Consolidated
Balance Sheets September 30, December 31,
(In thousands)
2016 2015 Cash, cash equivalents and total investments $ 624,605 $
798,849 Receivables 177,446 155,487 Inventory 54,155 38,411 Prepaid
expenses and other current assets 26,204 26,286 Property, plant and
equipment, net 262,181 254,819 Intangible assets, net and goodwill
426,423 472,059 Other assets 136,362 109,833
Total Assets $
1,707,376 $ 1,855,744 Long-term debt — current portion $ 3,000 $
65,737 Other current liabilities 187,240 170,470 Long-term debt
282,576 284,207 Deferred revenue — long-term 7,660 7,975 Other
long-term liabilities 17,206 13,080 Total shareholders' equity
1,209,694 1,314,275
Total Liabilities and Shareholders'
Equity $ 1,707,376 $ 1,855,744 Ordinary shares
outstanding (in thousands) 151,805 150,701
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 nine months ended September 30, 2016, which the
company intends to file in November 2016.
Non-GAAP Reconciliation from Prior to Current
Presentation
Pursuant to compliance and disclosure interpretations published
by the SEC in May 2016, the Company made certain changes to how it
presents non-GAAP net loss. The Company no longer adjusts the
deferred revenue recognized in the period and now reflects the tax
effect of the reconciling items, as opposed to the non-cash taxes,
as was previously the case. The Company revised its prior period
presentation to reflect its current period presentation. The
following reconciliation shows the effect of this change in
presentation of non-GAAP net income (loss) for each of the quarters
in the year ended December 31, 2015, the year ended December 31,
2015 and the quarter ended March 31, 2016:
Three Months Three Months
Three Months Three Months Year
Three Months Ended Ended Ended Ended Ended Ended
March 31, June 30, September 30, December 31, December 31, March
31, 2015 2015 2015 2015 2015 2016 Non-GAAP Net Income (Loss)
— as previously reported
$ 9,157 $ (13,585 )
$ (26,174 ) $ (22,629 ) $
(53,231 ) $ (24,566 )
Removal of the adjustment for deferred
revenue
328 460 384 (542 ) 630 442
Removal of the adjustment for non-cash
taxes
(488 ) (3,034 ) (677 ) 2,790 (1,409 ) 2,863
Adjustment for the income tax effect of
other non-GAAP adjustments
2,671 (2,531 ) (2,344 ) (618 ) (2,822 ) 3,340
Non-GAAP Net Income (Loss) — revised
$
11,668 $ (18,690 ) $ (28,811
) $ (20,999 ) $ (56,832 ) $
(17,921 ) Net Increase (Decrease) From Previously
Reported Non-GAAP Net Income (Loss)
$ 2,511 $
(5,105 ) $ (2,637 ) $ 1,630
$ (3,601 ) $ 6,645
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Alkermes plcFor Investors:Sandy Coombs, +1 781-609-6377orEva
Stroynowski, +1 781-609-6823orFor Media:Jennifer Snyder, +1
781-609-6166
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