— Record Revenues of $618.8 Million and
Non-GAAP Diluted EPS of $0.35 for Calendar 2014 —
— Preparing for Launch of Aripiprazole Lauroxil
and Advancing Pivotal Development Programs for ALKS 5461, ALKS 3831
and ALKS 8700 —
Alkermes plc (NASDAQ: ALKS) today reported financial results for
the twelve months ended Dec. 31, 2014 and provided financial
expectations for 2015.
“We had a tremendous year of achievement in 2014, marked by
successful execution of our ambitious business plan and exciting
clinical validation of our development pipeline, as we continue on
our path to create a major biopharmaceutical company. In the last
two months, the momentum has continued as we reported positive data
for three potential blockbuster opportunities: ALKS 5461 in major
depressive disorder, ALKS 3831 in schizophrenia and ALKS 8700 for
multiple sclerosis,” said Richard Pops, Chief Executive Officer of
Alkermes. “We have major opportunities ahead in 2015, as we advance
this pipeline of valuable CNS medicines. We are preparing to launch
aripiprazole lauroxil as an important new treatment option for
patients with schizophrenia and their caregivers, and we look
forward to continued clinical progress across the rest of our
development pipeline in 2015.”
“Our financial results for 2014 were ahead of expectations,
demonstrating our successful performance and the strength of our
business model. We ended the year with more than $800 million
in cash and investments, which provides the financial flexibility
to further execute on our strategic plan, including resources to
invest in a remarkable late-stage pipeline that we control
entirely,” commented James Frates, Chief Financial Officer of
Alkermes. “Our financial expectations for 2015 reflect investments
in this increasingly valuable late-stage pipeline, as well as
significant investment in our commercial organization in
preparation for the launch of aripiprazole lauroxil later this
year.”
Quarter Ended Dec. 31, 2014 Financial
Highlights
- Total revenues for the quarter grew 13%
to $175.2 million from $154.5 million for the same period in the
prior year.
- Non-GAAP net income was $16.8 million,
or a non-GAAP diluted earnings per share (EPS) of $0.11 for the
quarter. This compared to non-GAAP net income of $39.9 million, or
a non-GAAP diluted EPS of $0.27, for the same period in the prior
year and reflected increased investment in the company’s rapidly
advancing late-stage pipeline and commercial infrastructure.
- GAAP net income was $30.5 million, or a
basic GAAP EPS of $0.21 and a diluted GAAP EPS of $0.20, for the
quarter, including approximately $60 million that Alkermes earned
related to the acquisition of Civitas Therapeutics, Inc. (Civitas)
by Acorda Therapeutics, Inc. This compared to GAAP net income of
$18.1 million, or a basic GAAP EPS of $0.13 and diluted GAAP EPS of
$0.12, for the same period in the prior year.
- Free cash flow was $3.5 million for the
quarter, compared to $30.0 million for the same period in the prior
year.
Quarter Ended Dec. 31, 2014 Financial
Results
Revenues
- Manufacturing and royalty revenues from
the company’s long-acting atypical antipsychotic franchise,
RISPERDAL® CONSTA® and INVEGA® SUSTENNA®/XEPLION®, were $70.3
million, compared to $71.2 million for the same period in the prior
year.
- Manufacturing and royalty revenues from
AMPYRA®/FAMPYRA®1 were $24.3 million, compared to $18.6 million for
the same period in the prior year.
- Net sales of VIVITROL® were $29.7
million, compared to $20.6 million for the same period in the prior
year, representing an increase of 44%.
- Royalty revenue from BYDUREON® was $9.8
million, compared to $7.7 million for the same period in the prior
year.
Costs and Expenses
- Operating expenses for the quarter
ended Dec. 31, 2014 were $190.8 million, compared to $148.6 million
for the same period in the prior year, reflecting increased
investment in the company’s rapidly advancing development pipeline
and prelaunch activities for aripiprazole lauroxil.
- Income tax expense for the quarter
ended Dec. 31, 2014 was $10.3 million, compared to an income tax
benefit of $15.2 million for the same period in the prior
year.
Calendar Year 2014 Financial
Highlights
- Total revenues were $618.8 million in
calendar 2014, which included VIVITROL net sales of $94.2 million.
This compared to total revenues of $596.3 million for calendar
2013, which included $30.0 million of one-time intellectual
property license revenue. Please see the tables at the end of this
press release for a detailed breakdown of the revenues from our key
commercial products.
- Non-GAAP net income was $54.6 million,
or a non-GAAP diluted EPS of $0.35, for calendar 2014. This
compared to non-GAAP net income of $170.7 million, or a non-GAAP
diluted EPS of $1.19, for calendar 2013 and reflected increased
investment in the company’s rapidly advancing late-stage pipeline
and commercial infrastructure.
- GAAP net loss was $30.1 million, or a
basic and diluted GAAP loss per share of $0.21, for calendar 2014.
This compared to a GAAP net income of $20.6 million, or a basic
GAAP EPS of $0.15 and diluted GAAP EPS of $0.14, for calendar
2013.
- Free cash flow was $20.9 million for
calendar 2014, compared to $143.4 million for calendar 2013.
- At Dec. 31, 2014, Alkermes recorded
cash and total investments of $801.6 million, compared to $450.0
million at Dec. 31, 2013. The increase in cash reflects the
company’s active management of the business and was primarily
driven by gross proceeds of $250.0 million related to the sale of
Alkermes’ ordinary shares through a registered direct offering in
January 2014. Additionally, the company received net proceeds of
approximately $96 million from the sale of its stakes in Civitas
and Acceleron Pharma Inc. and from the sale of two buildings in
Athlone, Ireland. At Dec. 31, 2014, the company’s total debt
outstanding was $358.0 million.
Financial Expectations for
2015
The following outlines the company’s financial expectations for
2015. 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 $640 million to $670 million. Included
in this total revenue expectation, Alkermes expects VIVITROL net
sales to range from $125 million to $135 million and net sales from
the anticipated launch of aripiprazole lauroxil to range from $5
million to $10 million.
- Cost of Goods Manufactured and
Sold: The company expects cost of goods manufactured and sold
to range from $155 million to $165 million.
- Research and Development (R&D)
Expenses: The company expects R&D expenses to range from
$345 million to $365 million.
- Selling, General and Administrative
(SG&A) Expenses: The company expects SG&A expenses to
range from $310 million to $330 million.
- Amortization of Intangible
Assets: The company expects amortization of intangibles to be
approximately $65 million.
- Net Interest Expense: The
company expects net interest expense to range from $10 million to
$15 million.
- Income Tax Expense: The company
expects income tax expense to range from $10 million to $15
million.
- GAAP Net Loss: The company
expects a GAAP net loss in the range of $255 million to $285
million, or a basic and diluted loss per share of $1.70 to $1.90,
based on a weighted average basic and diluted share count of
approximately 150 million shares outstanding.
- Non-GAAP Net Loss: The company
expects a non-GAAP net loss in the range of $40 million to $60
million, and non-GAAP basic and diluted EPS to range from $0.27 to
$0.40.
- Capital Expenditures: The
company expects capital expenditures to be approximately $55
million.
- Free Cash Flow: The company
expects a free cash outflow in the range of $95 million to $115
million.
Conference Call
Alkermes will host a conference call at 8:30 a.m. EST (1:30 p.m.
GMT) on Tuesday, Feb. 24, 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. EST (4:00 p.m. GMT) on Tuesday, Feb. 24,
2015, through 5:00 p.m. EST (10:00 p.m. GMT) on Tuesday, March 3,
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 plc
Alkermes plc is a fully integrated, global biopharmaceutical
company that applies its scientific expertise and proprietary
technologies to develop innovative medicines that improve patient
outcomes. The company has a diversified portfolio of more than 20
commercial drug products and a substantial clinical pipeline of
product candidates that address central nervous system (CNS)
disorders such as addiction, schizophrenia, depression 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 manufacturing
facilities in Gainesville, Georgia and Wilmington, Ohio. For more
information, please visit Alkermes’ website at
www.alkermes.com.
Non-GAAP Financial
Measures
This press release includes information about certain financial
measures that are not prepared in accordance with generally
accepted accounting principles in the U.S. (GAAP), including
non-GAAP net income, non-GAAP diluted earnings per share and free
cash flow. These non-GAAP measures are not based on any
standardized methodology prescribed by GAAP and are not necessarily
comparable to similar measures presented by other companies.
Management defines its non-GAAP financial measures as
follows:
- Non-GAAP net income adjusts for
one-time and non-cash charges by excluding from GAAP results:
share-based compensation expense; amortization; depreciation;
non-cash net interest expense; non-cash tax expense; deferred
revenue; and certain other one-time or non-cash items.
- Free cash flow represents non-GAAP net
income less capital expenditures.
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,
non-GAAP diluted earnings per share and free cash flow are not
measures of financial performance under GAAP and, accordingly,
should not be considered as alternatives to GAAP measures as
indicators of operating performance.
A reconciliation of GAAP to non-GAAP financial measures has been
provided in the tables included in this press release.
Note Regarding Forward-Looking
Statements
Certain statements set forth above may constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, as amended, including,
but not limited to: statements concerning future financial and
operating performance, business plans or prospects; the likelihood
of continued revenue growth from the company’s commercial products;
the therapeutic and commercial value of the company’s products; and
expectations concerning the timing and results of clinical
development activities, including regulatory approval of
aripiprazole lauroxil. 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 “Risk Factors” in the company’s Transition Report on Form
10-K for the fiscal period ended Dec. 31, 2013, 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.;
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 Idec, under a licensing agreement with
Acorda Therapeutics, as FAMPYRA® (prolonged-release fampridine
tablets).
Alkermes plc and SubsidiariesSelected Financial
Information (Unaudited)
Condensed Consolidated Statements of Operations - GAAP(In
thousands, except per share data)
Three MonthsEndedDecember 31,2014
Three MonthsEndedDecember 31,2013
Revenues: Manufacturing and royalty revenues $ 143,202 $ 132,680
Product sales, net 29,684 20,609 Research and development revenues
2,275 1,189 Total Revenues 175,161 154,478
Expenses: Cost of goods manufactured and sold 46,368 42,892
Research and development 74,433 48,716 Selling, general and
administrative 54,804 44,171 Amortization of acquired intangible
assets 15,244 12,856 Total Expenses 190,849
148,635 Operating (Loss) Income (15,688 ) 5,843 Other
Income (Expense), net: Interest income 592 255 Interest expense
(3,333 ) (3,434 ) Gain on sale of property, plant and equipment
29,612 - Gain on sale of investment in Civitas Therapeutics, Inc.
29,564 - Other income, net 33 210 Total Other Income
(Expense), net 56,468 (2,969 ) Income Before Income Taxes
40,780 2,874 Income Tax Provision (Benefit) 10,266
(15,203 )
Net Income — GAAP $ 30,514 $ 18,077
Earnings Per Share: GAAP earnings per share —
basic $ 0.21 $ 0.13 GAAP earnings per share — diluted
$ 0.20 $ 0.12 Non-GAAP earnings per share — basic $
0.11 $ 0.29 Non-GAAP earnings per share — diluted $
0.11 $ 0.27
Weighted Average Number of
Ordinary Shares Outstanding: Basic — GAAP 146,882
137,158 Diluted — GAAP 155,527 146,304 Basic —
Non-GAAP 146,882 137,158 Diluted — Non-GAAP 155,527
146,304 An itemized reconciliation between net
income on a GAAP basis and non-GAAP net income is as follows:
Net Income — GAAP $ 30,514 $ 18,077 Adjustments:
Amortization expense 15,244 12,856 Share-based compensation expense
13,341 10,391 Depreciation expense 10,124 10,532 Non-cash taxes
7,324 (15,616 ) Non-cash net interest expense 237 243 Deferred
revenue (390 ) 3,381 Gain on sale of property, plant and equipment
(29,612 ) - Net gain on transactions with equity method investee
(29,961 ) -
Non-GAAP Net Income $ 16,821 $ 39,864
Capital expenditures (13,325 ) (9,856 )
Free Cash Flow $
3,496 $ 30,008
Condensed Consolidated Statements of Operations - GAAP(In
thousands, except per share data) Year EndedDecember 31,2014
Year EndedDecember 31,2013 Revenues: Manufacturing and royalty
revenues $ 516,876 $ 517,958 Product sales, net 94,160 71,841
Research and development revenues 7,753 6,534 Total
Revenues 618,789 596,333 Expenses: Cost of goods
manufactured and sold 175,832 182,297 Research and development
272,043 163,925 Selling, general and administrative 199,905 151,237
Amortization of acquired intangible assets 58,153 48,750
Restructuring - 12,300 Impairment of long-lived assets -
3,346 Total Expenses 705,933 561,855 Operating
(Loss) Income (87,144 ) 34,478 Other Income (Expense), net:
Interest income 1,972 882 Interest expense (13,430 ) (21,852 ) Gain
on sale of property, plant and equipment 41,933 - Gain on sale of
investment in Civitas Therapeutics, Inc. 29,564 - Gain on sale of
investment in Acceleron Pharma Inc. 15,296 - Other (expense), net
(2,220 ) (245 ) Total Other Income (Expense), net 73,115
(21,215 ) (Loss) Income Before Income Taxes (14,029 ) 13,263
Income Tax Provision (Benefit) 16,032 (7,385 )
Net (Loss)
Income — GAAP $ (30,061 ) $ 20,648
(Loss)
Earnings Per Share: GAAP (loss) earnings per share — basic $
(0.21 ) $ 0.15 GAAP (loss) earnings per share — diluted $
(0.21 ) $ 0.14 Non-GAAP earnings per share — basic $ 0.38
$ 1.26 Non-GAAP earnings per share — diluted $ 0.35
$ 1.19
Weighted Average Number of Ordinary
Shares Outstanding: Basic — GAAP 145,274 135,297
Diluted — GAAP 145,274 144,012 Basic — Non-GAAP
145,274 135,297 Diluted — Non-GAAP 154,415
144,012
An itemized reconciliation between net
(loss) income on a GAAP basis andnon-GAAP net income is as
follows:
Net (Loss) Income — GAAP $ (30,061 ) $ 20,648 Adjustments:
Share-based compensation expense 59,579 41,290 Amortization expense
58,153 48,750 Depreciation expense 39,934 40,360 Non-cash taxes
12,379 (7,747 ) Non-cash net interest expense 954 1,078 Deferred
revenue (997 ) 3,171 Gain on sale of investment in Acceleron Pharma
Inc. (15,296 ) - Net gain on transactions with equity method
investee (28,119 ) - Gain on sale of property, plant and equipment
(41,933 ) - Restructuring - 12,300 Loss on debt refinancing and
repricing - 7,541 Impairment of long-lived assets - 3,346
Non-GAAP Net Income $ 54,593 $ 170,737 Capital
expenditures (33,651 ) (27,313 )
Free Cash Flow $ 20,942
$ 143,424
Condensed Consolidated Balance Sheets(In thousands)
December 31,2014 December 31,2013 Cash, cash equivalents and total
investments $ 801,646 $ 449,995 Receivables 151,551 134,154
Inventory 51,357 46,218 Prepaid expenses and other current assets
42,719 27,535 Property, plant and equipment, net 265,740 274,490
Intangible assets, net and goodwill 573,624 630,305 Other assets
34,635 14,891
Total Assets $ 1,921,272 $ 1,577,588 Long-term
debt — current portion $ 6,750 $ 6,750 Other current liabilities
123,832 94,147 Long-term debt 351,220 357,543 Deferred revenue —
long-term 11,801 12,213 Other long-term liabilities 30,832 41,749
Total shareholders' equity 1,396,837 1,065,186
Total Liabilities
and Shareholders' Equity $ 1,921,272 $ 1,577,588
Ordinary shares outstanding (in thousands) 147,539 137,793
This selected financial information should
be read in conjunction with the consolidated financial
statementsand notes thereto included in Alkermes plc's Annual
Report on Form 10-K for the year endedDecember 31, 2014, which the
company intends to file in February 2015.
Revenues for Calendar Year 2014
(In thousands, except per share data)
Three MonthsEndedMarch 31,2014 Three
MonthsEndedJune 30,2014 Three MonthsEndedSeptember
30,2014 Three MonthsEndedDecember 31,2014
YearEndedDecember 31,2014
Revenues: RISPERDAL CONSTA/INVEGA SUSTENNA Franchise $ 49,608 $
60,001 $ 68,472 $ 70,311
$ 248,392 AMPYRA/FAMPYRA 20,631
19,518 16,503 24,273
80,925 BYDUREON 7,700 8,784 10,254
9,849
36,587 VIVITROL 17,079
21,595 25,802 29,684
94,160 Key Commercial Product Revenues 95,018
109,898 121,031 134,117 460,064
Total Legacy Product Revenues 33,341 42,063 36,799 38,769
150,972 Research and Development Revenues
1,853 1,463 2,162 2,275
7,753 Total Revenues $
130,212 $ 153,424 $
159,992 $175,161 $
618,789 2015
Guidance — GAAP to Non-GAAP Adjustments
An itemized reconciliation between
projected loss per share on a GAAP basis and projected earnings per
shareon a non-GAAP basis is as follows:
(In millions, except per share
data)
Amount
Shares (Loss)/EarningsPer Share
Projected Net Loss — GAAP $ (270.0 ) 150 $ (1.80 )
Adjustments: Non-cash net interest expense 1.0 Non-cash taxes 10.0
Depreciation expense 35.0 Amortization expense 65.0 Share-based
compensation expense 110.0 Deferred revenue (1.0 )
Projected Non-GAAP Net Loss $ (50.0 ) 150 $ (0.33 )
Capital expenditures 55.0
Projected Free Cash Outflow
$ (105.0 ) Projected GAAP and non-GAAP measures reflect
mid-points within ranges of estimated guidance.
AlkermesFor Investors:Rebecca Peterson, 781-609-6378orFor
Media:Jennifer Snyder, 781-609-6166
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