Full Press Release Details
| Alkermes Contacts: | ||
| For Investors: | Sandy Coombs +1 781 609 6377 | |
| For Media: | Katie Joyce +1 781 249 8927 |
Alkermes plc Reports Financial Results for the Fourth Quarter and Year Ended Dec. 31, 2020 and Provides Financial Expectations for 2021
-Revenues of $1.04 Billion in 2020, GAAP Loss per Share of $0.70 and Basic and Diluted Non-GAAP Earnings per Share of $0.43-
-Financial Expectations for 2021 Reflect Anticipated Growth of Proprietary Products and Investment in Strategic Priorities for Long-Term Value Creation-
DUBLIN, Feb. 11, 2021 - Alkermes plc (Nasdaq: ALKS) today reported financial results for the quarter and year ended Dec. 31, 2020 and provided financial expectations for 2021.
"2020 was a demonstration of the resiliency of our organization, as we adapted our business to endure a pandemic that has proved to be one of the most disruptive events in our recent history. Despite the challenges posed by COVID-19, we achieved significant growth of net sales from our portfolio of proprietary commercial products, advanced our pipeline of neuroscience and oncology candidates, and announced a Value Enhancement Plan designed to drive growth and improve operational and financial performance," said Richard Pops, Chief Executive Officer of Alkermes. "We are focused on value creation in 2021 as we seek to grow and diversify our commercial portfolio, demonstrate the value of our R&D investments, and manage the company for growth and long-term profitability, all while striving to make a meaningful difference in the lives of people living with serious mental illness, addiction and cancer."
Quarter Ended Dec. 31, 2020 Financial Highlights
Year Ended Dec. 31, 2020 Financial Results
"Our solid 2020 financial results demonstrate efficient management of our business from a financial and operational perspective in response to the significant disruptions caused by the pandemic. These efforts underscore our focus on execution and reflect our commitment to driving bottom line growth," commented Iain Brown, Chief Financial Officer of Alkermes. "We enter 2021 well positioned to execute on our strategic priorities and work toward the long-term profitability margin targets set forth in our Value Enhancement Plan. We plan to achieve these targets through commercial execution, focused investment in the company's future growth drivers and continued efforts to optimize our infrastructure and operating model. Our financial expectations for 2021 reflect anticipated growth of our commercial portfolio and focused investments to support the anticipated launch of LYBALVI and advance the clinical development program for nemvaleukin, as we position these programs to drive future value creation."
Financial Expectations for 2021
The following financial expectations for 2021 are based on recent trends and assume continuation of such trends into the first half of the year, and an anticipated improvement in patient access to treatment providers and to the company's commercial products in the second half of the year. If patient access does not improve as anticipated, or if new COVID-19-related disruptions emerge, the company's ability to meet these expectations could be negatively impacted. All line items are according to GAAP, except as otherwise noted.
| In millions (except per share amounts) | 2021 Expectation (Provided 2/11/21) | |
| Total Revenue | $1,100 - $1,170 | |
| VIVITROL Net Sales | $315 - $345 | |
| ARISTADA Net Sales | $260 - $290 | |
| LYBALVI Net Sales | <$10 | |
| Cost of Goods Sold | $190 - $200 | |
| R&D Expenses | $400 - $430* | |
| SG&A Expenses | $570 - $600 | |
| Amortization of Intangible Assets | ~$40 | |
| Income Tax Expense | $0 - $10 | |
| GAAP Net Loss | ($85) - ($125) | |
| GAAP Net Loss per Share | ($0.53) - ($0.78) | |
| Non-GAAP Net Income | $60 - $100 | |
| Non-GAAP Diluted EPS | $0.37 - $0.62 | |
| Capital Expenditures | ~$40 |
*R&D expense expectations for 2021 include a potential $25 million milestone payment to the former shareholders of Rodin related to the anticipated submission of an investigational new drug application, or equivalent, for ALKS 1140, the first clinical candidate to emerge from the histone deacetylase (HDAC) inhibitor platform acquired by the company in late 2019.
LYBALVI (formerly referred to as ALKS 3831)
Nemvaleukin alfa ("nemvaleukin", formerly referred to as ALKS 4230)
HDAC-inhibitor platform
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. 11, 2021, 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. 11, 2021, through Thursday, Feb. 18, 2021, 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 13715619.
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 expected drivers of future value creation, expectations of revenue growth and diversification of the company's commercial portfolio and the anticipated improvement in patient access to healthcare providers and to the company's commercial products; the company's ability to execute on its strategic priorities and plans to manage for long-term profitability through execution of its Value Enhancement Plan, including through the achievement of multi-year profitability targets, review and optimization of its cost structure and potential monetization of non-core assets; 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 LYBALVI; expectations concerning future development activities, including advancement of the nemvaleukin development program and the anticipated submission of an IND or equivalent for ALKS 1140 and plans to initiate related studies; and expectations concerning the company's commercial activities, including investments to support the anticipated launch of LYBALVI. 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 company's cost structure review and optimization may not yield the intended results; the company may not be able to achieve its targeted profitability metrics in a timely manner or at all; the impacts of the ongoing COVID-19 pandemic and continued efforts to mitigate its spread on the company's business, results of operations or financial condition, including impacts on healthcare systems that serve people living with opioid dependence, alcohol dependence and schizophrenia and on patient and healthcare provider access to the company's commercial products and impacts on the regulatory agencies with which the company interacts in the development, review, approval and commercialization of its medicines; 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 and other information included in our submissions to support the FDA's requirements for approval; clinical development activities may not be completed on time or at all; the results of the company's development activities may not be positive, or predictive of real-world results or of results in subsequent trials, and preliminary or interim results of the company's development activities may not be predictive of final results of such activities, results of future preclinical or clinical trials or real-world results; regulatory submissions may not occur or be submitted in a timely manner; the FDA or regulatory authorities outside the U.S. may make adverse decisions regarding the company's products, such as decisions not to approve the company's NDAs, including the NDA for LYBALVI; 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 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 year ended Dec. 31, 2020 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; LYBALVITM is a trademark of Alkermes Pharma Ireland Limited; RISPERDAL CONSTA , INVEGA SUSTENNA , XEPLION , INVEGA TRINZA and TREVICTA are registered trademarks of Johnson & Johnson; and VUMERITY is a registered trademark of Biogen Inc., used by Alkermes under license.
| 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, 2020 | December 31, 2019 | ||||||
| Revenues: | ||||||||
| Product sales, net | $ | 148,961 | $ | 149,609 | ||||
| Manufacturing and royalty revenues | 130,893 | 107,287 | ||||||
| Research and development revenue | 141 | 11,084 | ||||||
| License revenue | - | 144,750 | ||||||
| Total Revenues | 279,995 | 412,730 | ||||||
| Expenses: | ||||||||
| Cost of goods manufactured and sold | 42,922 | 46,482 | ||||||
| Research and development | 112,107 | 198,157 | ||||||
| Selling, general and administrative | 145,778 | 154,453 | ||||||
| Amortization of acquired intangible assets | 9,917 | 10,171 | ||||||
| Restructuring expense | - | 13,401 | ||||||
| Total Expenses | 310,724 | 422,664 | ||||||
| Operating Loss | (30,729 | ) | (9,934 | ) | ||||
| Other (Expense) Income, net: | ||||||||
| Interest income | 1,036 | 3,191 | ||||||
| Interest expense | (1,869 | ) | (3,196 | ) | ||||
| Change in the fair value of contingent consideration | (12,681 | ) | 5,000 | |||||
| Other income, net | 2,597 | 2,382 | ||||||
| Total Other (Expense) Income, net | (10,917 | ) | 7,377 | |||||
| Loss Before Income Taxes | (41,646 | ) | (2,557 | ) | ||||
| Provision for Income Taxes | 996 | 2,797 | ||||||
| Net Loss - GAAP | $ | (42,642 | ) | $ | (5,354 | ) | ||
| (Loss) Earnings Per Share: | ||||||||
| GAAP loss per share - basic and diluted | $ | (0.27 | ) | $ | (0.03 | ) | ||
| Non-GAAP earnings per share - basic and diluted | $ | 0.10 | $ | 0.83 | ||||
| Weighted Average Number of Ordinary Shares Outstanding: | ||||||||
| Basic and diluted - GAAP | 159,153 | 157,662 | ||||||
| Basic - Non-GAAP | 159,153 | 157,662 | ||||||
| Diluted - Non-GAAP | 161,267 | 159,073 | ||||||
| An itemized reconciliation between net loss on a GAAP basis and non-GAAP net income is as follows: | ||||||||
| Net Loss - GAAP | $ | (42,642 | ) | $ | (5,354 | ) | ||
| Adjustments: | ||||||||
| Share-based compensation expense | 24,884 | 21,387 | ||||||
| Depreciation expense | 10,411 | 10,340 | ||||||
| Amortization expense | 9,917 | 10,171 | ||||||
| Income tax effect related to reconciling items | 1,121 | 592 | ||||||
| Non-cash net interest expense | 166 | 168 | ||||||
| Change in the fair value of contingent consideration | 12,681 | (5,000 | ) | |||||
| Change in the fair value of warrants | - | (930 | ) | |||||
| Acquisition of IPR&D | - | 86,595 | ||||||
| Restructuring expense | - | 13,401 | ||||||
| Non-GAAP Net Income | $ | 16,538 | $ | 131,370 |
| 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, 2020 | December 31, 2019 | ||||||
| Revenues: | ||||||||
| Product sales, net | $ | 551,760 | $ | 524,499 | ||||
| Manufacturing and royalty revenues | 484,000 | 447,882 | ||||||
| Research and development revenue | 1,946 | 52,816 | ||||||
| License revenue | 1,050 | 145,750 | ||||||
| Total Revenues | 1,038,756 | 1,170,947 | ||||||
| Expenses: | ||||||||
| Cost of goods manufactured and sold | 178,316 | 180,385 | ||||||
| Research and development | 394,588 | 512,833 | ||||||
| Selling, general and administrative | 538,827 | 599,449 | ||||||
| Amortization of acquired intangible assets | 39,452 | 40,358 | ||||||
| Restructuring expense | - | 13,401 | ||||||
| Total Expenses | 1,151,183 | 1,346,426 | ||||||
| Operating Loss | (112,427 | ) | (175,479 | ) | ||||
| Other Income (Expense), net: | ||||||||
| Interest income | 6,960 | 13,976 | ||||||
| Interest expense | (8,659 | ) | (13,601 | ) | ||||
| Change in the fair value of contingent consideration | 3,945 | (22,800 | ) | |||||
| Other income, net | 13,644 | 848 | ||||||
| Total Other Income (Expense), net | 15,890 | (21,577 | ) | |||||
| Loss Before Income Taxes | (96,537 | ) | (197,056 | ) | ||||
| Provision (Benefit) for Income Taxes | 14,324 | (436 | ) | |||||
| Net Loss - GAAP | $ | (110,861 | ) | $ | (196,620 | ) | ||
| (Loss) Earnings Per Share: | ||||||||
| GAAP loss per share - basic and diluted | $ | (0.70 | ) | $ | (1.25 | ) | ||
| Non-GAAP earnings per share - basic and diluted | $ | 0.43 | $ | 0.71 | ||||
| Weighted Average Number of Ordinary Shares Outstanding: | ||||||||
| Basic and diluted - GAAP | 158,803 | 157,051 | ||||||
| Basic - Non-GAAP | 158,803 | 157,051 | ||||||
| Diluted - Non-GAAP | 159,861 | 159,056 | ||||||
| An itemized reconciliation between net loss on a GAAP basis and non-GAAP net income is as follows: | ||||||||
| Net Loss - GAAP | $ | (110,861 | ) | $ | (196,620 | ) | ||
| Adjustments: | ||||||||
| Share-based compensation expense | 90,161 | 100,977 | ||||||
| Depreciation expense | 42,402 | 40,055 | ||||||
| Amortization expense | 39,452 | 40,358 | ||||||
| Income tax effect related to reconciling items | 10,092 | 5,762 | ||||||
| Non-cash net interest expense | 666 | 673 | ||||||
| Change in the fair value of contingent consideration | (3,945 | ) | 22,800 | |||||
| Change in the fair value of warrants | - | (1,837 | ) | |||||
| Acquisition of IPR&D | 674 | 86,595 | ||||||
| Restructuring expense | - | 13,401 | ||||||
| Non-GAAP Net Income | $ | 68,641 | $ | 112,164 |
| Alkermes plc and Subsidiaries | ||||||||
| Selected Financial Information (Unaudited) | ||||||||
| Condensed Consolidated Balance Sheets | December 31, | December 31, | ||||||
| (In thousands) | 2020 | 2019 | ||||||
| Cash, cash equivalents and total investments | $ | 659,807 | $ | 614,370 | ||||
| Receivables | 275,143 | 257,086 | ||||||
| Contract assets | 14,401 | 8,386 | ||||||
| Inventory | 125,738 | 101,803 | ||||||
| Prepaid expenses and other current assets | 60,662 | 59,716 | ||||||
| Property, plant and equipment, net | 350,003 | 362,168 | ||||||
| Intangible assets, net and goodwill | 204,064 | 243,516 | ||||||
| Other assets | 259,912 | 158,358 | ||||||
| Total Assets | $ | 1,949,730 | $ | 1,805,403 | ||||
| Long-term debt - current portion | $ | 2,843 | $ | 2,843 | ||||
| Other current liabilities | 435,415 | 388,269 | ||||||
| Long-term debt | 272,118 | 274,295 | ||||||
| Contract liabilities - long-term | 16,397 | 22,068 | ||||||
| Other long-term liabilities | 155,975 | 32,486 | ||||||
| Total shareholders' equity | 1,066,982 | 1,085,442 | ||||||
| Total Liabilities and Shareholders' Equity | $ | 1,949,730 | $ | 1,805,403 | ||||
| Ordinary shares outstanding (in thousands) | 159,161 | 157,779 | ||||||
| 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, 2020, which the company intends to file in February 2021. |
| Alkermes plc and Subsidiaries | ||||||||||||||||||||
| Revenues for Calendar Year 2020 and 2019 | ||||||||||||||||||||
| 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) | 2020 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||
| Revenues: | ||||||||||||||||||||
| PARTNERED LONG-ACTING ANTIPSYCHOTICS (1) | $ | 82,243 | $ | 83,114 | $ | 87,876 | $ | 92,327 | $ | 345,560 | ||||||||||
| VIVITROL | 78,769 | 71,646 | 80,258 | 80,049 | 310,722 | |||||||||||||||
| ARISTADA | 50,957 | 58,769 | 62,400 | 68,912 | 241,038 | |||||||||||||||
| Key Commercial Product Revenues | 211,969 | 213,529 | 230,534 | 241,288 | 897,320 | |||||||||||||||
| Legacy Product Revenues | 34,008 | 33,391 | 32,475 | 38,566 | 138,440 | |||||||||||||||
| License Revenue | - | ` | - | 1,050 | - | 1,050 | ||||||||||||||
| Research and Development Revenues | 243 | 609 | 953 | 141 | 1,946 | |||||||||||||||
| Total Revenues | $ | 246,220 | $ | 247,529 | $ | 265,012 | $ | 279,995 | $ | 1,038,756 | ||||||||||
| 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 | ||||||||||
| (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. |
| Alkermes plc and Subsidiaries | ||||||||||||
| 2021 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 | $ | (105.0 | ) | 160 | $ | (0.66 | ) | |||||
| Adjustments: | ||||||||||||
| Share-based compensation expense | 93.0 | |||||||||||
| Depreciation expense | 46.0 | |||||||||||
| Amortization expense | 40.0 | |||||||||||
| Income tax effect related to reconciling items | 5.0 | |||||||||||
| Non-cash net interest expense | 1.0 | |||||||||||
| Projected Net Income - Non-GAAP | $ | 80.0 | 161 | $ | 0.50 | |||||||
| Projected GAAP and non-GAAP measures reflect mid-points within ranges of estimated guidance. |