— Record Revenues of $746 Million, GAAP Loss
Per Share of $1.38 and Non-GAAP Loss Per Share of $0.07 Reported
for 2016 —
— VIVITROL® Net Sales Grew by 45%
Year-Over-Year to $209.0 Million —
— 2017 Total Revenues Expected to Grow by
Approximately 20%, Driven by Continuing Volume Growth of VIVITROL
and ARISTADA® —
— Company Plans to Submit New Drug Application
for ALKS 5461 in 2017 —
Alkermes plc (NASDAQ: ALKS) today reported financial results for
the twelve months ended Dec. 31, 2016 and provided financial
expectations for 2017.
“Our 2016 financial results reflect the strong growth of our
proprietary commercial products and demonstrate the power and
breadth of the Alkermes business,” commented James Frates, Chief
Financial Officer of Alkermes. “We enter 2017 in a strong financial
position and expect total revenues to grow approximately 20%,
driven by the robust volume growth of VIVITROL® and ARISTADA®. In
2017, we are making additional investments that will drive the
future growth of Alkermes, including in our development pipeline,
the commercial organization for ALKS 5461 and expanded VIVITROL
manufacturing capabilities to support expected demand into the
2020s.”
“We have built Alkermes to thrive in an increasingly challenging
biopharmaceutical industry. Our base business of FDA-approved
medicines is significant and growing, led by VIVITROL and ARISTADA.
We have identified our next phase of growth based on a remarkable,
late-stage, phase 3 portfolio. Our focus on large, chronic diseases
of the CNS coupled with our approach to selecting, developing, and
commercializing medicines is unique and built for a complex public
health environment,” said Richard Pops, Chief Executive Officer of
Alkermes. “2017 will bring an unprecedented level of activity
across all of the major areas of Alkermes. Our proprietary
commercial products, VIVITROL and ARISTADA, will continue their
growth as we bring new and distinctive features to patients and
providers. For ARISTADA, we expect approval and launch of the
two-month dose mid-year, which will be the only two-month option
available in the long-acting injectable antipsychotic market. Our
late-stage pipeline will continue to evolve rapidly, highlighted by
the planned NDA submission for ALKS 5461 in major depressive
disorder, the completion of the pivotal efficacy study of ALKS 3831
in schizophrenia, and completion of the required elements for
registration of ALKS 8700 in multiple sclerosis.”
Quarter Ended Dec. 31, 2016 Financial
Highlights
- Total revenues for the quarter were
$213.5 million. This compared to $163.1 million for the same period
in the prior year, representing an increase of 31%.
- Net loss according to generally
accepted accounting principles in the U.S. (GAAP) was $21.1
million, or a basic and diluted GAAP loss per share of $0.14. This
compared to GAAP net loss of $69.4 million, or a basic and diluted
GAAP loss per share of $0.46 for the same period in the prior
year.
- Non-GAAP net income was $23.3 million,
or a non-GAAP basic and diluted earnings per share of $0.15 for the
quarter. This compared to non-GAAP net loss of $21.0 million, or a
non-GAAP basic and diluted loss per share of $0.14 for the same
period in the prior year.
Quarter Ended Dec. 31, 2016 Financial
Results
Revenues
- Net sales of VIVITROL were $62.1
million, compared to $38.2 million for the same period in the prior
year, representing an increase of 62%. On a unit basis, sales grew
67% compared to the same period in the prior year.
- Net sales of ARISTADA were $17.3
million, up from $4.6 million in the fourth quarter of 2015, which
was the quarter of launch.
- Manufacturing and royalty revenues from
RISPERDAL CONSTA®, INVEGA SUSTENNA®/XEPLION® and INVEGA
TRINZA®/TREVICTA® were $74.0 million, compared to $75.1 million for
the same period in the prior year.
- Manufacturing and royalty revenues from
AMPYRA®/FAMPYRA®1 were $32.3 million, representing a 69% increase
compared to $19.1 million for the same period in the prior
year.
- Royalty revenue from BYDUREON® was
$11.3 million, compared to $12.2 million for the same period in the
prior year.
Costs and Expenses
- Operating expenses were $237.1 million
for the quarter ended Dec. 31, 2016, compared to $230.2 million for
the same period in the prior year.
Calendar Year 2016 Financial
Highlights
- Total revenues increased 19% to $745.7
million in 2016, which included VIVITROL net sales of $209.0
million and ARISTADA net sales of $47.2 million. This compared to
total revenues of $628.3 million for 2015. Please see the tables at
the end of this press release for a detailed breakdown of the
revenues from our key commercial products.
- GAAP net loss was $208.4 million, or a
basic and diluted GAAP loss per share of $1.38, for 2016. This
compared to a GAAP net loss of $227.2 million, or a basic and
diluted GAAP loss per share of $1.52, for 2015.
- Non-GAAP net loss was $10.3 million, or
a non-GAAP basic and diluted loss per share of $0.07, for 2016.
This compared to non-GAAP net loss of $56.8 million, or a non-GAAP
basic and diluted loss per share of $0.38, for 2015.
- At Dec. 31, 2016, Alkermes recorded
cash and total investments of $619.2 million, compared to $798.8
million at Dec. 31, 2015. At Dec. 31, 2016, the company’s total
debt outstanding was $283.7 million, compared to $349.9 million at
Dec. 31, 2015.
Financial Expectations for
2017
The following outlines the company’s financial expectations for
2017, which include investments in commercial infrastructure in
preparation for the expected launch of ALKS 5461 in 2018 and in
Alkermes’ pipeline of late-stage development candidates. The
following statements are forward-looking, and actual results may
differ materially. Please see “Note Regarding Forward-Looking
Statements” at the end of this press release for risks that could
cause results to differ materially from these forward-looking
statements.
- Revenues: The company expects
total revenues to range from $870 million to $920 million, a 17% to
23% increase from 2016, driven by continuing growth of VIVITROL and
ARISTADA. Included in this total revenue expectation, Alkermes
expects VIVITROL net sales to range from $280 million to $300
million.
- Cost of Goods Manufactured and
Sold: The company expects cost of goods manufactured and sold
to range from $150 million to $160 million.
- Research and Development (R&D)
Expenses: The company expects R&D expenses to range from
$405 million to $435 million.
- Selling, General and Administrative
(SG&A) Expenses: The company expects SG&A expenses to
range from $425 million to $455 million.
- Amortization of Intangible
Assets: The company expects amortization of intangibles to be
approximately $60 million.
- Net Interest Expense: The
company expects net interest expense to be approximately $10
million.
- Income Tax Expense: The company
expects income tax expense of up to $10 million.
- GAAP Net Loss: The company
expects GAAP net loss to range from $180 million to $210 million,
or a basic and diluted loss per share of $1.17 to $1.36, based on a
weighted average basic and diluted share count of approximately 154
million shares outstanding.
- Non-GAAP Net Income (Loss): The
company expects its non-GAAP financial measure to be in the range
of non-GAAP net loss of $15 million to non-GAAP net income of $15
million. This equates to a non-GAAP basic loss per share of $0.10
to a non-GAAP basic income per share of $0.10, based on a weighted
average basic share count of approximately 154 million shares
outstanding, and a non-GAAP diluted loss per share of $0.10 to a
non-GAAP diluted income per share of $0.09, based on a weighted
average diluted share count of approximately 161 million shares
outstanding.
- Capital Expenditures: The
company expects capital expenditures to range from $70 million to
$80 million.
Conference Call
Alkermes will host a conference call at 8:30 a.m. ET (1:30 p.m.
GMT) on Wednesday, Feb. 15, 2017, to discuss these financial
results and provide an update on the company. The conference call
may be accessed by visiting Alkermes’ website or 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
(4:00 p.m. GMT) on Wednesday, Feb. 15, 2017, through 5:00 p.m. ET
(10:00 p.m. GMT) on Wednesday, Feb. 22, 2017, and may be accessed
by visiting Alkermes’ website or by dialing +1 888 843 7419 for
U.S. callers and +1 630 652 3042 for international callers. The
replay access code is 6037988.
About Alkermes plc
Alkermes plc is a fully integrated, global
biopharmaceutical company 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 (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 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, 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
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: future financial and
operating performance, business plans or prospects, including the
launch of ALKS 5461; the likelihood of continued revenue growth
from the company’s commercial products, including the growth of
VIVITROL and ARISTADA; the therapeutic and commercial value of the
company’s products; and expectations concerning the timing and
results of clinical development activities, including the timing of
the NDA submission for ALKS 5461. 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 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 any other
subsequent filings made by the company, with the Securities and
Exchange Commission (“SEC”) and which are available on the SEC’s
website at www.sec.gov. Existing and prospective investors are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date they are made. The
information contained in this press release is provided by the
company as of the date hereof, and, except as required by law, the
company disclaims any intention or responsibility for updating 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;
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 December 31, December 31,
(In thousands, except per share data) 2016 2015 Revenues:
Manufacturing and royalty revenues $ 133,804 $ 119,310 Product
sales, net 79,451 42,816 Research and development revenues 259
972 Total Revenues 213,514 163,098
Expenses: Cost of goods manufactured and sold 34,957 34,791
Research and development 89,627 93,686 Selling, general and
administrative 97,145 87,472 Amortization of acquired intangible
assets 15,322 14,206 Total Expenses 237,051
230,155 Operating Loss (23,537 ) (67,057 ) Other Expense,
net: Interest income 835 1,010 Interest expense (4,896 ) (3,319 )
Loss on the Gainesville Transaction - (301 ) Change in the fair
value of contingent consideration 4,800 (5,000 ) Other (expense)
income, net (1,515 ) 1,874 Total Other Expense, net (776 )
(5,736 ) Loss Before Income Taxes (24,313 ) (72,793 ) Income Tax
Benefit (3,172 ) (3,411 )
Net Loss — GAAP $ (21,141 ) $
(69,382 )
Net (Loss) Earnings Per Share: GAAP net
loss per share — basic and diluted $ (0.14 ) $ (0.46 ) Non-GAAP net
earnings (loss) per share — basic and diluted $ 0.15 $ (0.14
)
Weighted Average Number of Ordinary Shares
Outstanding: Basic and diluted — GAAP 152,148 150,330
Basic — Non-GAAP 152,148 150,330 Diluted —
Non-GAAP 159,212 150,330 An itemized
reconciliation between net loss on a GAAP basis and non-GAAP net
income (loss) is as follows:
Net Loss — GAAP $ (21,141 ) $
(69,382 ) Adjustments: Share-based compensation expense 19,783
22,869 Amortization expense 15,322 14,206 Depreciation expense
9,326 7,575 Income tax effect related to reconciling items 1,636
(618 ) Non-cash net interest expense 194 233 Loss on warrants and
equity method investments 866 463 Loss on debt refinancing 2,075 -
Change in the fair value of contingent consideration (4,800 ) 5,000
Loss on the Gainesville Transaction - 301 Gain on sale of property,
plant and equipment - (1,646 )
Non-GAAP Net Income
(Loss) $ 23,261 $ (20,999 ) Year
Ended Year Ended
Condensed Consolidated Statements of Operations
- GAAP December 31, December 31,
(In thousands, except per
share data) 2016 2015 Revenues: Manufacturing and royalty
revenues $ 487,247 $ 475,288 Product sales, net 256,146 149,028
Research and development revenues 2,301 4,019 Total
Revenues 745,694 628,335 Expenses: Cost of goods
manufactured and sold 132,122 138,989 Research and development
387,148 344,404 Selling, general and administrative 374,130 311,558
Amortization of acquired intangible assets 60,959 57,685
Total Expenses 954,359 852,636 Operating Loss
(208,665 ) (224,301 ) Other (Expense) Income, net: Interest income
3,752 3,330 Interest expense (14,889 ) (13,247 ) Gain on the
Gainesville Transaction - 9,636 Change in the fair value of
contingent consideration 7,900 (2,300 ) Other (expense) income, net
(2,485 ) 2,877 Total Other (Expense) Income, net (5,722 )
296 Loss Before Income Taxes (214,387 ) (224,005 ) Income
Tax (Benefit) Provision (5,943 ) 3,158
Net Loss —
GAAP $ (208,444 ) $ (227,163 )
Net Loss Per
Share: GAAP net loss per share — basic and diluted $ (1.38 ) $
(1.52 ) Non-GAAP net loss per share — basic and diluted $ (0.07 ) $
(0.38 )
Weighted Average Number of Ordinary Shares
Outstanding: Basic and diluted — GAAP and Non-GAAP 151,484
149,206 An itemized reconciliation between net
loss on a GAAP basis and non-GAAP net loss is as follows:
Net
Loss — GAAP $ (208,444 ) $ (227,163 ) Adjustments: Share-based
compensation expense 94,396 97,342 Amortization expense 60,958
57,685 Depreciation expense 33,298 27,911 Income tax effect related
to reconciling items 2,252 (2,822 ) Loss (gain) on warrants and
equity method investments 2,130 (1,286 ) Non-cash net interest
expense 888 938 Upfront license option payment to Reset
Therapeutics, Inc. charged to R&D expense 10,000 - Loss on debt
refinancing 2,075 Change in the fair value of contingent
consideration (7,900 ) 2,300 Gain on the Gainesville Transaction -
(9,636 ) Gain on sale of property, plant and equipment -
(2,101 )
Non-GAAP Net Loss $ (10,347 ) $ (56,832 )
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 December 31, December 31,
(In thousands) 2016
2015 Cash, cash equivalents and total investments $ 619,164 $
798,849 Receivables 191,102 155,487 Inventory 62,998 38,411 Prepaid
expenses and other current assets 39,345 26,286 Property, plant and
equipment, net 264,785 254,819 Intangible assets, net and goodwill
411,100 472,059 Other assets 137,929 109,833
Total Assets $
1,726,423 $ 1,855,744 Long-term debt — current portion $ 3,000 $
65,737 Other current liabilities 208,993 170,470 Long-term debt
280,666 284,207 Deferred revenue — long-term 7,122 7,975 Other
long-term liabilities 17,161 13,080 Total shareholders' equity
1,209,481 1,314,275
Total Liabilities and Shareholders'
Equity $ 1,726,423 $ 1,855,744 Ordinary shares
outstanding (in thousands) 152,431 150,701
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, 2016, which the company intends to file
in February 2017.
Revenues for Calendar Year 2016 and 2015
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) 2016 2016
2016 2016
2016 Revenues:
PARTNERED LONG-ACTING ANTIPSYCHOTICS (1) $ 54,667 $ 69,578 $ 73,251
$ 73,967
$ 271,463 AMPYRA/FAMPYRA 28,194 40,848 12,897
32,254
114,193 BYDUREON 10,533 12,303 11,554 11,256
45,646 VIVITROL 43,827 47,242 55,804 62,109
208,982
ARISTADA 5,547 10,277
13,998 17,342
47,164 Key
Commercial Product Revenues 142,768 180,248
167,504 196,928 687,448 Legacy Product
Revenues (2) 12,765 14,305 12,548 16,327
55,945 Research and
Development Revenues 1,241 612
189 259
2,301 Total
Revenues $ 156,774 $
195,165 $ 180,241 $
213,514 $ 745,694 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)
2015 2015 2015
2015
2015 Revenues: PARTNERED LONG-ACTING
ANTIPSYCHOTICS (1) $ 46,864 $ 60,841 $ 67,606 $ 75,074
$
250,385 AMPYRA/FAMPYRA 36,549 26,939 22,132 19,116
104,736 BYDUREON 9,800 11,081 13,039 12,195
46,115
VIVITROL 31,137 37,172 37,903 38,227
144,439 ARISTADA
- - - 4,589
4,589 Key Commercial Product Revenues
124,350 136,033 140,680 149,201
550,264 Legacy Product Revenues (2) 17,314 13,737
11,295 12,925
55,271 Gainesville Revenues 19,167 565 - -
19,732 Research and Development Revenues 383
1,035 678 972
3,068 Total Revenues $
161,214 $ 151,370 $
152,653 $ 163,098 $
628,335 Total Revenues excluding Gainesville Revenues
$ 142,047 $ 150,805 $
152,653 $ 163,098 $ 608,603
(1) - Includes RISPERDAL CONSTA, INVEGA SUSTENNA/XEPLION and
INVEGA TRINZA/TREVICTA.
(2) - Includes legacy product revenues, excluding product
revenues sold as part of the Gainesville transaction.
2017 Guidance — GAAP to Non-GAAP
Adjustments
An itemized reconciliation between
projected loss per share on a GAAP basis and projected earnings
(loss) per share
on a non-GAAP basis is as follows:
(Loss)/Earnings
(In
millions, except per share data) Amount
Shares Per Share
Projected Net Loss —
GAAP $ (195.0 ) 154 $ (1.27 ) Adjustments: Non-cash net
interest expense 1.0 Income tax effect related to reconciling items
1.5 Depreciation expense 37.5 Amortization expense 60.0 Share-based
compensation expense 95.0
Projected Non-GAAP Net
Income (Loss) $ - 161 $ -
Projected GAAP and non-GAAP measures reflect mid-points within
ranges of estimated guidance.
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Alkermes plcFor Investors:Sandy Coombs, +1 781-609-6377orEva
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