Full Press Release Details
| Alkermes Contacts: | ||
| For Investors: | Sandy Coombs +1 781 609 6377 | |
| For Media: | Eva Stroynowski +1 781 609 6823 |
Alkermes Plc Reports Financial Results for the Fourth Quarter and Year Ended Dec. 31, 2019, and Provides Financial Expectations for 2020
- Revenues of $1.17 Billion in 2019, Driven by Year-Over-Year Growth of Proprietary Product Net Sales and VUMERITY Milestone Payment -
- 2019 GAAP Net Loss per Share of $1.25 and Diluted Non-GAAP
Earnings per Share of $0.71 -
- Financial Expectations for 2020 Reflect Growth of Proprietary Products and Impact of Strategic Restructuring -
DUBLIN, Ireland, Feb. 13, 2020 - Alkermes plc (Nasdaq: ALKS) today reported financial results for the quarter and year ended Dec. 31, 2019 and provided financial expectations for 2020.
"2019 was an important year for Alkermes as we took active steps to shape the future of our business and continued to make a real-world impact in the treatment of serious diseases. We made significant progress on three fronts: driving growth in our proprietary product portfolio, advancing and expanding our diversified neuroscience and oncology pipeline, and positioning the business for long-term growth and future profitability," said Richard Pops, Chief Executive Officer of Alkermes. "Looking ahead, our priorities for 2020 are clear as we focus on commercial execution for VIVITROL and ARISTADA , prepare for potential approval and launch of ALKS 3831, advance the development of ALKS 4230, and continue to develop our pipeline of preclinical assets. We remain steadfast in our commitment to be a positive force for change through our science, our medicines, and our advocacy, as we advance patient-centered care."
Quarter Ended Dec. 31, 2019 Financial Highlights
Quarter Ended Dec. 31, 2019 Financial Results
"Our 2019 results reflect volume growth of VIVITROL and ARISTADA, continued strength of our royalty and manufacturing portfolio and investment in the commercialization of our products and our research and development pipeline," commented James Frates, Chief Financial Officer of Alkermes. "We enter 2020 well positioned to drive growth of our proprietary product portfolio and advance our pipeline of novel oncology and neuroscience candidates. Our financial expectations for 2020 reflect anticipated net
sales growth of our proprietary products and operating expenses in line with the predicted impact of the strategic restructuring that we implemented in the fourth quarter of 2019, reflecting our commitment to non-GAAP profitability while investing in the long-term growth of the company."
Calendar Year 2019 Financial Highlights
Financial Expectations for 2020
The following outlines the company's financial expectations for 2020, which reflect the expected impact of the strategic restructuring implemented in 2019. All line items are according to GAAP, except as otherwise noted.
Alkermes will host a conference call and webcast presentation with accompanying slides at 8:00 a.m. ET (1:00 p.m. GMT) on Thursday, Feb. 13, 2020, to discuss these financial results and provide an update on the company. The webcast may be accessed on the Investors section of Alkermes' website at www.alkermes.com. The conference call may be accessed by dialing +1 877 407 2988 for U.S. callers and +1 201 389 0923 for international callers. In addition, a replay of the conference call will be available from 11:00 a.m. ET (4:00 p.m. GMT) on Thursday, Feb. 13, 2020, through Thursday, Feb. 20, 2020, and may be accessed by visiting Alkermes' website or by dialing +1 877 660 6853 for U.S. callers and +1 201 612 7415 for international callers. The replay conference ID is 13698323.
Alkermes plc is a fully integrated, global biopharmaceutical company developing innovative medicines in the fields of neuroscience and oncology. The company has a portfolio of proprietary commercial products focused on addiction and schizophrenia, and a pipeline of product candidates in development for schizophrenia, bipolar I disorder, neurodegenerative disorders and cancer. 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 GAAP, including non-GAAP net income (loss) and non-GAAP basic and 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, are useful in identifying underlying trends in ongoing operations. However, non-GAAP net income (loss) and non-GAAP basic and 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 basic and 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: the company's expectations concerning future financial and operating performance, business plans or prospects, including the potential cost savings that may be achieved in connection with the company's implementation of a restructuring, the company's potential to achieve profitability and long-term growth, and expectations concerning continued revenue growth from the company's commercial products and royalty streams; the potential therapeutic and commercial value of the company's marketed and development products; the FDA's target PDUFA action date for, and
potential approval of, the NDA for ALKS 3831; expectations concerning future development activities, including the advancement of the ALKS 4230 clinical development program, and expansion of the company's neuroscience and oncology pipeline; and expectations concerning the company's commercial activities, including launch preparations for ALKS 3831. The company cautions that forward-looking statements are inherently uncertain. 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 or products using our proprietary technologies, which may lead to competition from generic drug manufacturers; data from clinical trials may be interpreted by the FDA in different ways than we interpret it; the FDA may not agree with our regulatory approval strategies or components of our filings for our products, including our clinical trial designs, conduct and methodologies and the adequacy of the data included in our filings to support the FDA's requirements for approval of the proposed indications; clinical development activities may not be completed on time or at all; the results of our 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 licensees may not be able to continue to successfully commercialize their 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 subsequent filings made by the company with the U.S. Securities and Exchange Commission ("SEC"), 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 hereof. Except as required by law, the company disclaims any intention or responsibility for updating or revising any forward-looking statements contained in this press release.
VIVITROL is a registered trademark of Alkermes, Inc.; ARISTADA and ARISTADA INITIO are registered trademarks of Alkermes Pharma Ireland Limited; RISPERDAL CONSTA , INVEGA SUSTENNA , XEPLION , INVEGA TRINZA and TREVICTA are registered trademarks of Johnson & Johnson; VUMERITY is a registered trademark of Biogen Inc., used by Alkermes under license; and AMPYRA and FAMPYRA are registered trademarks of Acorda Therapeutics, Inc. ("Acorda").
| Alkermes plc and Subsidiaries | ||||||||
| Selected Financial Information (Unaudited) | ||||||||
| Condensed Consolidated Statements of Operations - GAAP | Three Months Ended | Three Months Ended | ||||||
| (In thousands, except per share data) | December 31, 2019 | December 31, 2018 | ||||||
| Revenues: | ||||||||
| Product sales, net | $ | 149,609 | $ | 132,650 | ||||
| Manufacturing and royalty revenues | 107,287 | 167,422 | ||||||
| License revenue | 144,750 | 120 | ||||||
| Research and development revenue | 11,084 | 15,570 | ||||||
| Total Revenues | 412,730 | 315,762 | ||||||
| Expenses: | ||||||||
| Cost of goods manufactured and sold | 46,482 | 49,117 | ||||||
| Research and development | 198,157 | 108,972 | ||||||
| Selling, general and administrative | 154,453 | 141,227 | ||||||
| Amortization of acquired intangible assets | 10,171 | 16,426 | ||||||
| Restructuring expense | 13,401 | - | ||||||
| Total Expenses | 422,664 | 315,742 | ||||||
| Operating (Loss) Income | (9,934 | ) | 20 | |||||
| Other Income (Expense), net: | ||||||||
| Interest income | 3,191 | 3,292 | ||||||
| Interest expense | (3,196 | ) | (3,478 | ) | ||||
| Change in the fair value of contingent consideration | 5,000 | (2,300 | ) | |||||
| Other expense, net | 2,382 | 775 | ||||||
| Total Other Income (Expense), net | 7,377 | (1,711 | ) | |||||
| Loss Before Income Taxes | (2,557 | ) | (1,691 | ) | ||||
| Provision for Income Taxes | 2,797 | 8,022 | ||||||
| Net Loss - GAAP | $ | (5,354 | ) | $ | (9,713 | ) | ||
| (Loss) Earnings Per Share: | ||||||||
| GAAP loss per share - basic and diluted | $ | (0.03 | ) | $ | (0.06 | ) | ||
| Non-GAAP earnings per share - basic | $ | 0.83 | $ | 0.35 | ||||
| Non-GAAP earnings per share - diluted | $ | 0.83 | $ | 0.34 | ||||
| Weighted Average Number of Ordinary Shares Outstanding: | ||||||||
| Basic and diluted - GAAP | 157,662 | 155,506 | ||||||
| Basic - Non-GAAP | 157,662 | 155,506 | ||||||
| Diluted - Non-GAAP | 159,073 | 159,518 | ||||||
| An itemized reconciliation between net loss on a GAAP basis and non-GAAP net income is as follows: | ||||||||
| Net Loss - GAAP | $ | (5,354 | ) | $ | (9,713 | ) | ||
| Adjustments: | ||||||||
| Share-based compensation expense | 21,387 | 29,314 | ||||||
| Amortization expense | 10,171 | 16,426 | ||||||
| Depreciation expense | 10,340 | 9,476 | ||||||
| Income tax effect related to reconciling items | 592 | 1,533 | ||||||
| Non-cash net interest expense | 168 | 169 | ||||||
| Change in the fair value of warrants and equity method investments | (930 | ) | (410 | ) | ||||
| Change in the fair value of contingent consideration | (5,000 | ) | 2,300 | |||||
| Acquisition of IPR&D | 86,595 | - | ||||||
| Restructuring expense | 13,401 | - | ||||||
| Fixed asset impairment | - | 5,746 | ||||||
| Non-GAAP Net Income | $ | 131,370 | $ | 54,841 |
| Alkermes plc and Subsidiaries | ||||||||
| Selected Financial Information (Unaudited) | ||||||||
| Condensed Consolidated Statements of Operations - GAAP | Year Ended | Year Ended | ||||||
| (In thousands, except per share data) | December 31, 2019 | December 31, 2018 | ||||||
| Revenues: | ||||||||
| Product sales, net | $ | 524,499 | $ | 450,334 | ||||
| Manufacturing and royalty revenues | 447,882 | 526,675 | ||||||
| License revenue | 145,750 | 48,370 | ||||||
| Research and development revenue | 52,816 | 68,895 | ||||||
| Total Revenues | 1,170,947 | 1,094,274 | ||||||
| Expenses: | ||||||||
| Cost of goods manufactured and sold | 180,385 | 176,420 | ||||||
| Research and development | 512,833 | 425,406 | ||||||
| Selling, general and administrative | 599,449 | 526,408 | ||||||
| Amortization of acquired intangible assets | 40,358 | 65,168 | ||||||
| Restructuring expense | 13,401 | - | ||||||
| Total Expenses | 1,346,426 | 1,193,402 | ||||||
| Operating Loss | (175,479 | ) | (99,128 | ) | ||||
| Other Expense, net: | ||||||||
| Interest income | 13,976 | 9,238 | ||||||
| Interest expense | (13,601 | ) | (15,437 | ) | ||||
| Change in the fair value of contingent consideration | (22,800 | ) | (19,600 | ) | ||||
| Other income (expense), net | 848 | (2,040 | ) | |||||
| Total Other Expense, net | (21,577 | ) | (27,839 | ) | ||||
| Loss Before Income Taxes | (197,056 | ) | (126,967 | ) | ||||
| (Benefit) Provision for Income Taxes | (436 | ) | 12,344 | |||||
| Net Loss - GAAP | $ | (196,620 | ) | $ | (139,311 | ) | ||
| (Loss) Earnings Per Share: | ||||||||
| GAAP loss per share - basic and diluted | $ | (1.25 | ) | $ | (0.90 | ) | ||
| Non-GAAP earnings per share - basic | $ | 0.71 | $ | 0.63 | ||||
| Non-GAAP earnings per share - diluted | $ | 0.71 | $ | 0.61 | ||||
| Weighted Average Number of Ordinary Shares Outstanding: | ||||||||
| Basic and diluted - GAAP | 157,051 | 155,112 | ||||||
| Basic - Non-GAAP | 157,051 | 155,112 | ||||||
| Diluted - Non-GAAP | 159,056 | 160,363 | ||||||
| An itemized reconciliation between net loss on a GAAP basis and non-GAAP net income is as follows: | ||||||||
| Net Loss - GAAP | $ | (196,620 | ) | $ | (139,311 | ) | ||
| Adjustments: | ||||||||
| Share-based compensation expense | 100,977 | 105,357 | ||||||
| Amortization expense | 40,358 | 65,168 | ||||||
| Depreciation expense | 40,055 | 38,492 | ||||||
| Income tax effect related to reconciling items | 5,762 | (4,002 | ) | |||||
| Non-cash net interest expense | 673 | 700 | ||||||
| Change in the fair value of warrants and equity method investments | (1,837 | ) | 190 | |||||
| Change in the fair value of contingent consideration | 22,800 | 19,600 | ||||||
| Acquisition of IPR&D | 86,595 | - | ||||||
| Restructuring expense | 13,401 | 3,598 | ||||||
| Fixed asset impairment | - | 5,746 | ||||||
| Debt refinancing charge | - | 2,298 | ||||||
| Non-GAAP Net Income | $ | 112,164 | $ | 97,836 |
| Alkermes plc and Subsidiaries | ||||||||
| Selected Financial Information (Unaudited) | ||||||||
| Condensed Consolidated Balance Sheets | December 31, | December 31, | ||||||
| (In thousands) | 2019 | 2018 | ||||||
| Cash, cash equivalents and total investments | $ | 614,370 | $ | 620,039 | ||||
| Receivables | 257,086 | 292,223 | ||||||
| Contract assets | 8,386 | 8,230 | ||||||
| Inventory | 101,803 | 90,196 | ||||||
| Prepaid expenses and other current assets | 59,716 | 53,308 | ||||||
| Property, plant and equipment, net | 362,168 | 309,987 | ||||||
| Intangible assets, net and goodwill | 243,516 | 283,874 | ||||||
| Other assets | 158,358 | 167,150 | ||||||
| Total Assets | $ | 1,805,403 | $ | 1,825,007 | ||||
| Long-term debt - current portion | $ | 2,843 | $ | 2,843 | ||||
| Other current liabilities | 388,269 | 336,931 | ||||||
| Long-term debt | 274,295 | 276,465 | ||||||
| Contract liabilities - long-term | 22,068 | 9,525 | ||||||
| Other long-term liabilities | 32,486 | 27,958 | ||||||
| Total shareholders' equity | 1,085,442 | 1,171,285 | ||||||
| Total Liabilities and Shareholders' Equity | $ | 1,805,403 | $ | 1,825,007 | ||||
| Ordinary shares outstanding (in thousands) | 157,779 | 155,757 | ||||||
| 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, 2019, which the company intends to file in February 2020. |
| Alkermes plc and Subsidiaries | ||||||||||||||||||||
| Revenues for Calendar Year 2019 and 2018 | ||||||||||||||||||||
| 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) | 2019 | 2019 | 2019 | 2019 | 2019 | |||||||||||||||
| Revenues: | ||||||||||||||||||||
| PARTNERED LONG-ACTING ANTIPSYCHOTICS (1) | $ | 75,605 | $ | 91,863 | $ | 76,716 | $ | 79,147 | $ | 323,331 | ||||||||||
| VIVITROL | 69,183 | 88,199 | 85,164 | 92,818 | 335,364 | |||||||||||||||
| ARISTADA | 30,298 | 48,436 | 53,610 | 56,791 | 189,135 | |||||||||||||||
| Key Commercial Product Revenues | 175,086 | 228,498 | 215,490 | 228,756 | 847,830 | |||||||||||||||
| Legacy Product Revenues | 33,310 | 36,034 | 27,067 | 28,140 | 124,551 | |||||||||||||||
| License Revenue (2) | - | 1,000 | - | 144,750 | 145,750 | |||||||||||||||
| Research and Development Revenues | 14,706 | 14,340 | 12,686 | 11,084 | 52,816 | |||||||||||||||
| Total Revenues | $ | 223,102 | $ | 279,872 | $ | 255,243 | $ | 412,730 | $ | 1,170,947 | ||||||||||
| 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) | 2018 | 2018 | 2018 | 2018 | 2018 | |||||||||||||||
| Revenues: | ||||||||||||||||||||
| PARTNERED LONG-ACTING ANTIPSYCHOTICS (1) | $ | 68,790 | $ | 85,181 | $ | 77,202 | $ | 81,372 | $ | 312,545 | ||||||||||
| VIVITROL | 62,682 | 76,203 | 79,893 | 83,831 | 302,609 | |||||||||||||||
| ARISTADA | 29,160 | 33,604 | 36,142 | 48,819 | 147,725 | |||||||||||||||
| Key Commercial Product Revenues | 160,632 | 194,988 | 193,237 | 214,022 | 762,879 | |||||||||||||||
| Legacy Product Revenues | 45,811 | 43,060 | 39,209 | 86,050 | 214,130 | |||||||||||||||
| License Revenue (3) | - | 48,250 | - | 120 | 48,370 | |||||||||||||||
| Research and Development Revenues | 18,707 | 18,344 | 16,274 | 15,570 | 68,895 | |||||||||||||||
| Total Revenues | $ | 225,150 | $ | 304,642 | $ | 248,720 | $ | 315,762 | $ | 1,094,274 | ||||||||||
| (1) - Includes RISPERDAL CONSTA, INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA. | ||||||||||||||||||||
| (2) - Includes a milestone payment received in the fourth quarter of 2019 which was allocated to the license sold to Biogen in connection with the VUMERITY collaboration. | ||||||||||||||||||||
| (3) - Includes a milestone payment received in the second quarter of 2018 which was allocated to the license sold to Biogen in connection with the VUMERITY collaboration. |
| Alkermes plc and Subsidiaries | ||||||||||||
| 2020 Guidance - GAAP to Non-GAAP Adjustments | ||||||||||||
| An itemized reconciliation between projected loss per share on a GAAP basis and projected earnings per share on a non-GAAP basis is as follows: | ||||||||||||
| (In millions, except per share data) | Amount | Shares | (Loss) Earnings Per Share | |||||||||
| Projected Net Loss - GAAP | $ | (145.0 | ) | 159 | $ | (0.91 | ) | |||||
| Adjustments: | ||||||||||||
| Share-based compensation expense | 110.0 | |||||||||||
| Amortization expense | 40.0 | |||||||||||
| Depreciation expense | 44.0 | |||||||||||
| Non-cash net interest expense | 1.0 | |||||||||||
| Income tax effect related to reconciling items | 5.0 | |||||||||||
| Projected Net Income - Non-GAAP | $ | 55.0 | 161 | $ | 0.34 | |||||||
| Projected GAAP and non-GAAP measures reflect mid-points within ranges of estimated guidance. |