Alkermes plc 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 Sheet
At 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 Expectations
Alkermes
reiterates its Financial Expectations for 2016 set forth in its press
release dated July 28, 2016.
Conference Call
Alkermes 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 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.
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 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 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 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20161102005243/en/
Alkermes plc
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