— Second Quarter Revenues Increase 29%
Year-Over-Year to $195.2 Million; GAAP Loss per Share of $0.31 and
Non-GAAP Loss per Share of $0.01 —
— Company Improves Financial Expectations for
2016 Driven by Strong VIVITROL® Performance —
— ARISTADA® Revenues Grow as Launch Progresses
—
Alkermes plc (NASDAQ: ALKS) today reported financial results for
the second quarter of 2016.
“Our second quarter results demonstrate the power of our
business model to efficiently capture operating leverage as our
topline grows. These results reflect the growth of VIVITROL® and
launch of ARISTADA® as well as the continued strength of our
royalty and manufacturing business. VIVITROL’s robust growth
continued as we expand access and utilization in the large Medicaid
patient population. We are also encouraged by our progress with the
launch of ARISTADA, for which our second quarter results were
slightly ahead of expectations,” commented James Frates, Chief
Financial Officer of Alkermes. “Today we are improving our
financial expectations for 2016 to reflect the accelerating growth
in VIVITROL net sales. With our highly diversified portfolio and
strong financial position, we have the resources to advance our
innovative pipeline and invest in the ongoing launch of ARISTADA
and growth of VIVITROL.”
“Our proprietary commercial products, VIVITROL and ARISTADA,
represent important growth opportunities at a time when substance
abuse and mental illness are significant public health priorities,”
said Richard Pops, Chief Executive Officer of Alkermes. “Against
this backdrop, we continue to make important advances for VIVITROL
and are just beginning to see what its ultimate potential may be.
The launch of ARISTADA in the rapidly growing, long-acting
antipsychotic market continues to progress well, with reimbursement
and access initiatives advancing across the country. We are also
making headway on our late-stage pipeline of product candidates:
the phase 3 studies for ALKS 3831 for schizophrenia and ALKS 8700
for multiple sclerosis will enroll throughout the remainder of
2016, and we expect to report topline data from the FORWARD-5 study
of ALKS 5461 for major depressive disorder by year-end.”
Quarter Ended June 30, 2016
Highlights
- Total revenues for the quarter were
$195.2 million. This compared to $151.4 million for the same period
in the prior year.
- Net loss according to generally
accepted accounting principles in the U.S. (GAAP) was $47.2
million, or a basic and diluted GAAP loss per share of $0.31, 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 $46.1 million, or a basic and diluted
GAAP loss per share of $0.31, for the same period in the prior
year.
- Non-GAAP net loss was $1.6 million, or
a non-GAAP basic and diluted loss per share of $0.01, for the
quarter. This compared to non-GAAP net loss of $18.7 million, or a
non-GAAP basic and diluted loss per share of $0.13, for the same
period in the prior year.
Quarter Ended June 30, 2016 Financial
Results
Revenues
- Net sales of VIVITROL were $47.2
million, compared to $37.2 million for the same period in the prior
year.
- Net sales of ARISTADA were $10.3
million, up from $5.5 million in the first quarter of 2016.
- Manufacturing and royalty revenues from
RISPERDAL CONSTA®, INVEGA SUSTENNA®/XEPLION® and INVEGA
TRINZA®/TREVICTA® were $69.6 million, compared to $60.8 million for
the same period in the prior year.
- Manufacturing and royalty revenues from
AMPYRA®/FAMPYRA®1 were $40.8 million, compared to $26.9 million for
the same period in the prior year, reflecting the timing of
shipments.
- Royalty revenue from BYDUREON® was
$12.3 million, compared to $11.1 million for the same period in the
prior year.
Costs and Expenses
- Operating expenses were $242.3 million,
reflecting increased investment in the company’s development
pipeline and the continued launch of ARISTADA. Operating expenses
for the quarter ended June 30, 2015 were $203.9 million.
Balance Sheet
At June 30, 2016, Alkermes had cash and total investments of
$677.7 million, compared to $798.8 million at Dec. 31, 2015. At
June 30, 2016, the company’s total debt outstanding was $347.0
million. Alkermes expects to pay down $60.0 million of term loan
upon maturity in September 2016. The remainder of the debt is due
in September 2019.
Financial Expectations
Alkermes is updating its financial expectations for 2016 as a
result of accelerating growth trends for VIVITROL, which are
driving a $10 million increase in expected revenues and a
corresponding $10 million improvement in GAAP net loss. This, in
addition to certain changes to the calculation of non-GAAP
measures, pursuant to guidelines issued by the Securities and
Exchange Commission (“SEC”), results in a $20 million improvement
to non-GAAP net loss. The following outlines Alkermes’ updated
financial expectations for 2016.
- Revenues: The company now
expects total revenues to range from $710 million to $760 million,
up from the previous range of $700 million to $750 million.
- The company now expects VIVITROL net
sales to range from $190 million to $210 million, up from a
previous range of $180 million to $200 million.
- Cost of Goods Manufactured and
Sold: The company continues to expect cost of goods
manufactured and sold to range from $125 million to $135
million.
- Research and Development (R&D)
Expenses: The company continues to expect R&D expenses to
range from $370 million to $400 million.
- Selling, General and Administrative
(SG&A) Expenses: The company continues to expect SG&A
expenses to range from $360 million to $390 million.
- Amortization of Intangible
Assets: The company continues to expect amortization of
intangible assets of approximately $60 million.
- Net Interest Expense: The
company continues to expect net interest expense of approximately
$10 million.
- Net Income Tax Expense: The
company continues to expect net income tax expense to range from $0
million to $10 million.
- GAAP Net Loss: The company now
expects GAAP net loss to range from $215 million to $245 million,
or a basic and diluted loss per share of $1.41 to $1.61, based on
weighted average basic and diluted share counts of approximately
152 million shares outstanding. This compares to previous
expectations of GAAP net loss in the range of $225 million to $255
million, or a basic and diluted loss per share of approximately
$1.48 to $1.68, based on weighted average basic and diluted share
counts of approximately 152 million shares outstanding.
- Non-GAAP Net Loss: The company
now expects non-GAAP net loss to range from $5 million to $35
million, or a basic and diluted loss per share of $0.03 to $0.23,
based on weighted average basic and diluted share counts of
approximately 152 million shares outstanding. This compares to
previous expectations of non-GAAP net loss in the range of $25
million to $55 million, or a non-GAAP diluted loss per share of
$0.16 to $0.36, based on weighted average diluted share counts of
approximately 152 million shares outstanding.
- Capital Expenditures: The
company continues to expect capital expenditures to be
approximately $45 million.
Conference Call
Alkermes will host a conference call at 8:30 a.m. EDT (1:30 p.m.
BST) on Thursday, July 28, 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. EDT (4:00 p.m. BST) on Thursday, July 28,
2016, through 5:00 p.m. EDT (10:00 p.m. BST) on Thursday, August 4,
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 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 (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.
Following compliance and disclosure interpretations published by
the SEC in May 2016, the company made certain changes to how it
presents non-GAAP net income (loss). Non-GAAP net income (loss) in
the three and six months ended June 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. Previously, non-GAAP
net income (loss) excluded from GAAP results: the aforementioned
items; an adjustment for deferred revenue recognized in the period;
and an adjustment for non-cash tax expense, rather than the income
tax effect of the reconciling items. The company revised its
presentation for certain prior periods to reflect its current
non-GAAP net income (loss) methodology. A reconciliation of the
prior non-GAAP net income (loss) to the revised non-GAAP net income
(loss) for such prior periods has been provided in the tables
included in this press release. The company provides the following
limited reconciling items under the previous methodology: deferred
revenue of $0.5 million and non-cash taxes of $3.8 million for the
quarterly period ended June 30, 2016; the company has provided this
information for comparative purposes in connection with the
transition to the new non-GAAP net income (loss) methodology, and
will not provide this information on an ongoing basis.
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; 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. 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; 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 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 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 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 June
30, June 30,
(In thousands, except per share data)
2016 2015 Revenues: Manufacturing and royalty
revenues $ 137,034 $ 113,162 Product sales, net 57,519 37,172
Research and development revenues 612
1,036 Total Revenues
195,165 151,370 Expenses: Cost of goods
manufactured and sold 33,998 30,418 Research and development 97,007
87,882 Selling, general and administrative 96,120 71,539
Amortization of acquired intangible assets
15,157 14,052 Total Expenses
242,282 203,891 Operating
Loss (47,117 ) (52,521 ) Other
(Expense) Income, net: Interest income 994 795 Interest expense
(3,323 ) (3,315 ) Gain on Gainesville Transaction - 9,911 Increase
in the fair value of contingent consideration 2,200 1,500 Other
(expense) income, net (467 ) 585
Total Other (Expense) Income, net
(596 ) 9,476 Loss Before Income Taxes
(47,713 ) (43,045 ) Income Tax
(Benefit) Provision (520 ) 3,064
Net Loss — GAAP $ (47,193 ) $
(46,109 )
Net Loss Per Share: GAAP net loss per share
— basic and diluted $ (0.31 ) $ (0.31 ) Non-GAAP net loss per share
— basic and diluted $ (0.01 ) $ (0.13 )
Weighted Average
Number of Ordinary Shares Outstanding: Basic and diluted — GAAP
and Non-GAAP 151,301 148,867
An itemized reconciliation between net loss on a GAAP basis
and non-GAAP net loss is as follows:
Net Loss — GAAP $
(47,193 ) $ (46,109 ) Adjustments: Share-based compensation expense
26,631 21,877 Amortization expense 15,157 14,052 Depreciation
expense 7,927 6,584 Income tax effect related to reconciling items
(2,051 ) (2,531 ) Non-cash net interest expense 231 235 Gain on
warrants and equity method investments (127 ) (1,273 ) Increase in
the fair value of contingent consideration (2,200 ) (1,500 ) Gain
on Gainesville Transaction - (9,911 ) Gain on sale of property,
plant and equipment - (114 )
Non-GAAP Net
Loss $ (1,625 ) $ (18,690 )
Six Months Six Months Ended Ended
Condensed
Consolidated Statements of Operations - GAAP June 30, June 30,
(In thousands, except per share data)
2016 2015 Revenues: Manufacturing and royalty revenues $ 243,194 $
241,906 Product sales, net 106,893 68,309 Research and development
revenues 1,853 2,369
Total Revenues 351,940
312,584 Expenses: Cost of goods manufactured and sold
61,709 70,392 Research and development 198,079 158,160 Selling,
general and administrative 185,840 134,589 Amortization of acquired
intangible assets 30,313
29,272 Total Expenses 475,941
392,413 Operating Loss
(124,001 ) (79,829 ) Other (Expense) Income, net:
Interest income 2,005 1,455 Interest expense (6,618 ) (6,603 ) Gain
on Gainesville Transaction - 9,911 Increase in the fair value of
contingent consideration 4,100 1,500 Other (expense) income, net
(218 ) 374 Total Other
(Expense) Income, net (731 )
6,637 Loss Before Income Taxes
(124,732 ) (73,192 ) Income Tax (Benefit) Provision
(116 ) 3,574
Net Loss —
GAAP $ (124,616 ) $ (76,766 )
Net Loss Per Share: GAAP net loss per share — basic and
diluted $ (0.82 ) $ (0.52 ) Non-GAAP net loss per share — basic and
diluted $ (0.13 ) $ (0.05 )
Weighted Average Number of
Ordinary Shares Outstanding: Basic and diluted — GAAP and
Non-GAAP 151,063 148,480
An itemized reconciliation between net loss on a GAAP basis and
non-GAAP net loss is as follows:
Net Loss — GAAP $ (124,616
) $ (76,766 ) Adjustments: Share-based compensation expense 50,887
39,206 Amortization expense 30,313 29,272 Depreciation expense
15,475 13,850 Income tax effect related to reconciling items 1,289
140 Loss (gain) on warrants and equity method investments 743
(1,670 ) Non-cash net interest expense 463 471 Upfront license
option payment to Reset Therapeutics, Inc. charged to R&D
expense 10,000 - Increase in the fair value of contingent
consideration (4,100 ) (1,500 ) Gain on Gainesville Transaction -
(9,911 ) Gain on sale of property, plant and equipment -
(114 )
Non-GAAP Net Loss $ (19,546 ) $ (7,022
)
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 income (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 June 30, December 31,
(In
thousands) 2016 2015 Cash, cash equivalents and total
investments $ 677,671 $ 798,849 Receivables 185,008 155,487
Inventory 49,896 38,411 Prepaid expenses and other current assets
38,369 26,286 Property, plant and equipment, net 258,354 254,819
Intangible assets, net and goodwill 441,746 472,059 Other assets
134,242 109,833
Total Assets $ 1,785,286 $
1,855,744 Long-term debt — current portion $ 63,913 $ 65,737 Other
current liabilities 172,350 170,470 Long-term debt 283,120 284,207
Deferred revenue — long-term 6,943 7,975 Other long-term
liabilities 15,434 13,080 Total shareholders' equity
1,243,526 1,314,275
Total Liabilities and Shareholders'
Equity $ 1,785,286 $ 1,855,744 Ordinary shares
outstanding (in thousands) 151,503 150,701
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 six months ended June 30, 2016, which the company
intends to file in July 2016.
2016 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 $
(230.0 ) 152 $ (1.51 ) Adjustments: Non-cash net interest expense
1.0 Income taxes 5.0 Depreciation expense 32.5 Amortization expense
60.0 Share-based compensation expense 101.5 Upfront license option
payment to Reset Therapeutics, Inc. charged to R&D expense
10.0
Projected Non-GAAP Net Loss $
(20.0 ) 152 $ (0.13 )
Projected GAAP and non-GAAP measures reflect mid-points within
ranges of estimated guidance.
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 revised guidance above includes the
impact of these items, in addition to an adjustment related to the
$10 million license option payment to Reset Therapeutics, Inc. and
an $11 million reduction to share-based compensation expense.
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
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160728005241/en/
Alkermes Contacts:For
Investors:Sandy Coombs, +1 781-609-6377orEva Stroynowski, +1
781-609-6823orFor Media:Jennifer Snyder, +1 781-609-6166
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