Full Press Release Details
| Alkermes Contacts: | ||
| For Investors: | Sandy Coombs +1 781 609 6377 | |
| For Media: | Matthew Henson +1 781 609 6637 |
Alkermes Plc Reports Financial Results for the Year Ended Dec. 31, 2018 and Provides Financial Expectations for 2019
- Record Revenues of $1.09 Billion in 2018, Driven by 24% Year-Over-Year Growth of Proprietary Product Net Sales -
- Company Reports 2018 GAAP Net Loss per Share of $0.90 and Diluted Non-GAAP
Earnings per Share of $0.61 -
- 2019 Net Sales of Proprietary Products Expected to Grow Approximately 24%, Reflecting Continued Growth of VIVITROL and ARISTADA -
DUBLIN, Ireland, Feb. 14, 2019 - Alkermes plc (Nasdaq: ALKS) today reported financial results for the year ended Dec. 31, 2018 and provided financial expectations for 2019.
"Our strong financial results in 2018 were driven by the growth of our proprietary commercial products and the continued strength and diversity of our royalty and manufacturing business," commented James Frates, Chief Financial Officer of Alkermes. "As we enter 2019, our financial expectations reflect the continued growth of our proprietary products, VIVITROL and ARISTADA , as well as important investments in the future growth drivers of the company including our advancing development pipeline and commercial capabilities to support our expanding presence in schizophrenia."
Quarter Ended Sept. 30, 2018 Financial Highlights
The launch of ARISTADA INITIO ii continues to gain traction as payers and providers recognize the value proposition of this important new offering, particularly in combination with the ARISTADA two-month dose which provides the unique ability to fully dose a patient on day one for up to two monthsiii. With this offering, we are supporting continuity of care which is critically important for this patient population. We also continue to build the customized commercial capabilities necessary to navigate this complex treatment environment, including recent expansions of our field- and hospital-based teams," stated Jim Robinson, President and Chief Operating Officer of Alkermes. "VIVITROL results for 2018 were in-line with our expectations and we are encouraged by solid growth trends across many states. As we enter 2019, we remain committed to increasing access to VIVITROL and driving increased adoption in order to meet the needs of patients with opioid and alcohol dependence."
Quarter Ended Dec. 31, 2018 Financial Results
Calendar Year 2018 Financial Highlights
"Alkermes is defined by our commitment to making medicines that help address critical public health challenges, using our scientific insights to develop medicines that are designed with the real-world needs of patients in mind. Following the positive results of the ALKS 3831 ENLIGHTEN-2 pivotal study and the increasing traction of ARISTADA in the market, we continue to establish our emerging leadership position in the treatment of schizophrenia," said Richard Pops, Chief Executive Officer of Alkermes. "2019 will be an important year for our late-stage pipeline highlighted by the planned submission of the
ALKS 3831 New Drug Application and the regulatory review of the recently submitted New Drug Application for diroximel fumarate for multiple sclerosis, with expected action in the fourth quarter. As development activities surrounding our ALKS 4230 immuno-oncology program gain momentum, we expect to have our first indications of ALKS 4230's anti-tumor response activity this year, and we look forward to updating you on our progress."
Financial Expectations for 2019
The following outlines the company's financial expectations for 2019, which include planned investments in the company's pipeline of development candidates and commercial infrastructure to support the company's expanding presence in schizophrenia.
Alkermes will host a conference call and webcast presentation with accompanying slides at 8:30 a.m. ET (1:30 p.m. BST) on Thursday, Feb. 14, 2019, 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. BST) on Thursday, Feb. 14, 2019, through Thursday, Feb. 21, 2019, 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 13687392.
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 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 future financial and operating performance, business plans or prospects; expectations concerning continued revenue growth from the company's commercial products, including the growth of VIVITROL, ARISTADA and ARISTADA INITIO and the company's expanding presence in the field of treatment of schizophrenia; expectations concerning the company's continued investment in its commercial capabilities and the value that can be derived therefrom; the potential therapeutic and commercial value of the company's marketed and development products, and patient access to and adoption of such products; expectations concerning the timing and results of clinical development and regulatory activities, including the anticipated presentation of data from the ENLIGHTEN-2 phase 3 clinical trial for ALKS 3831, the planned submission of an NDA for ALKS 3831, topline results from the EVOLVE-MS-2 head-to-head study of diroximel fumarate (BIIB098) compared to TECFIDERA, the FDA's anticipated acceptance of, and action with respect to, the NDA for diroximel fumarate, topline results from the phase 3b clinical trial evaluating ARISTADA INITIO plus ARISTADA two-month dose alongside INVEGA SUSTENNA, the progress of, and presentation of initial data from, the ALKS 4230 phase 1 study, and the initiation of a subcutaneous dosing phase 1 study for ALKS 4230. 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 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; 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; TECFIDERA is a registered trademark of Biogen Inc.; and AMPYRA and FAMPYRA are registered trademarks of Acorda Therapeutics, Inc. ("Acorda")
i The term "ARISTADA" as used in this press release refers to ARISTADA and ARISTADA INITIO, unless the context indicates otherwise.
ii ARISTADA INITIO was approved by the FDA for the initiation of ARISTADA, a long-acting injectable atypical antipsychotic for the treatment of schizophrenia in adults. ARISTADA INITIO is to be administered with a single 30 mg dose of oral aripiprazole.
iii ARISTADA INITIO + single 30 mg oral dose of aripiprazole replaces need for concomitant three weeks of oral aripiprazole for initiation of ARISTADA, with relevant levels of aripiprazole concentration reached within four days.
iv AMPYRA (dalfampridine) Extended Release Tablets, 10 mg is developed and marketed in the U.S. by Acorda and outside the U.S. by Biogen Inc., under a licensing agreement with Acorda, as FAMPYRA (prolonged-release fampridine tablets).
| Alkermes plc and Subsidiaries | ||||||||
| Selected Financial Information (Unaudited) | ||||||||
| Three Months Ended | Three Months Ended | |||||||
| Condensed Consolidated Statements of Operations - GAAP | December 31, | December 31, | ||||||
| (In thousands, except per share data) | 2018 | 2017 | ||||||
| Revenues: | ||||||||
| Manufacturing and royalty revenues | $ | 167,422 | $ | 138,700 | ||||
| Product sales, net | 132,650 | 103,941 | ||||||
| Research and development revenue | 15,570 | 4,729 | ||||||
| License revenues | 120 | 28,000 | ||||||
| Total Revenues | 315,762 | 275,370 | ||||||
| Expenses: | ||||||||
| Cost of goods manufactured and sold | 49,117 | 38,507 | ||||||
| Research and development | 108,972 | 104,490 | ||||||
| Selling, general and administrative | 141,227 | 110,896 | ||||||
| Amortization of acquired intangible assets | 16,426 | 15,642 | ||||||
| Total Expenses | 315,742 | 269,535 | ||||||
| Operating Income | 20 | 5,835 | ||||||
| Other (Expense) Income, net: | ||||||||
| Interest income | 3,292 | 1,362 | ||||||
| Interest expense | (3,478 | ) | (3,192 | ) | ||||
| Change in the fair value of contingent consideration | (2,300 | ) | 5,700 | |||||
| Other expense, net | 775 | 1,081 | ||||||
| Total Other (Expense) Income, net | (1,711 | ) | 4,951 | |||||
| (Loss) Income Before Income Taxes | (1,691 | ) | 10,786 | |||||
| Provision for income taxes | 8,022 | 20,575 | ||||||
| Net Loss - GAAP | $ | (9,713 | ) | $ | (9,789 | ) | ||
| Net (Loss) Earnings Per Share: | ||||||||
| GAAP net loss per share - basic and diluted | $ | (0.06 | ) | $ | (0.06 | ) | ||
| Non-GAAP earnings per share - basic | $ | 0.35 | $ | 0.33 | ||||
| Non-GAAP earnings per share - diluted | $ | 0.34 | $ | 0.31 | ||||
| Weighted Average Number of Ordinary Shares Outstanding: | ||||||||
| Basic and diluted - GAAP | 155,506 | 153,865 | ||||||
| Basic - Non-GAAP | 155,506 | 153,865 | ||||||
| Diluted - Non-GAAP | 159,518 | 160,036 | ||||||
| An itemized reconciliation between net loss on a GAAP basis and non-GAAP net income is as follows: | ||||||||
| Net Loss - GAAP | $ | (9,713 | ) | $ | (9,789 | ) | ||
| Adjustments: | ||||||||
| Share-based compensation expense | 29,314 | 20,581 | ||||||
| Amortization expense | 16,426 | 15,642 | ||||||
| Depreciation expense | 9,476 | 9,575 | ||||||
| Fixed asset impairment | 5,746 | - | ||||||
| Change in the fair value of contingent consideration | 2,300 | (5,700 | ) | |||||
| Income tax effect related to reconciling items | 1,533 | (1,726 | ) | |||||
| Non-cash net interest expense | 169 | 192 | ||||||
| Change in the fair value of warrants and equity method investments | (410 | ) | 64 | |||||
| Income tax charge related to 2017 income tax reform (1) | - | 21,453 | ||||||
| Non-GAAP Net Income | $ | 54,841 | $ | 50,292 |
| Alkermes plc and Subsidiaries | ||||||||
| Selected Financial Information (Unaudited) | ||||||||
| Year Ended | Year Ended | |||||||
| Condensed Consolidated Statements of Operations - GAAP | December 31, | December 31, | ||||||
| (In thousands, except per share data) | 2018 | 2017 | ||||||
| Revenues: | ||||||||
| Manufacturing and royalty revenues | $ | 526,675 | $ | 505,308 | ||||
| Product sales, net | 450,334 | 362,834 | ||||||
| Research and development revenues | 68,895 | 7,232 | ||||||
| License revenues | 48,370 | 28,000 | ||||||
| Total Revenues | 1,094,274 | 903,374 | ||||||
| Expenses: | ||||||||
| Cost of goods manufactured and sold | 176,420 | 154,748 | ||||||
| Research and development | 425,406 | 412,889 | ||||||
| Selling, general and administrative | 526,408 | 421,578 | ||||||
| Amortization of acquired intangible assets | 65,168 | 62,059 | ||||||
| Total Expenses | 1,193,402 | 1,051,274 | ||||||
| Operating Loss | (99,128 | ) | (147,900 | ) | ||||
| Other (Expense) Income, net: | ||||||||
| Interest income | 9,238 | 4,649 | ||||||
| Interest expense | (15,437 | ) | (12,008 | ) | ||||
| Change in the fair value of contingent consideration | (19,600 | ) | 21,600 | |||||
| Other expense, net | (2,040 | ) | (9,615 | ) | ||||
| Total Other (Expense) Income, net | (27,839 | ) | 4,626 | |||||
| Loss Before Income Taxes | (126,967 | ) | (143,274 | ) | ||||
| Provision for income taxes | 12,344 | 14,671 | ||||||
| Net Loss - GAAP | $ | (139,311 | ) | $ | (157,945 | ) | ||
| Net (Loss) Earnings Per Share: | ||||||||
| GAAP net loss per share - basic and diluted | $ | (0.90 | ) | $ | (1.03 | ) | ||
| Non-GAAP earnings per share - basic | $ | 0.63 | $ | 0.18 | ||||
| Non-GAAP earnings per share - diluted | $ | 0.61 | $ | 0.17 | ||||
| Weighted Average Number of Ordinary Shares Outstanding: | ||||||||
| Basic and diluted - GAAP | 155,112 | 153,415 | ||||||
| Basic - Non-GAAP | 155,112 | 153,415 | ||||||
| Diluted - Non-GAAP | 160,363 | 160,062 | ||||||
| An itemized reconciliation between net loss on a GAAP basis and non-GAAP net income is as follows: | ||||||||
| Net Loss - GAAP | $ | (139,311 | ) | $ | (157,945 | ) | ||
| Adjustments: | ||||||||
| Share-based compensation expense | 105,357 | 83,917 | ||||||
| Amortization expense | 65,168 | 62,059 | ||||||
| Depreciation expense | 38,492 | 36,464 | ||||||
| Change in the fair value of contingent consideration | 19,600 | (21,600 | ) | |||||
| Fixed asset impairment | 5,746 | - | ||||||
| Restructuring expense | 3,598 | - | ||||||
| Debt refinancing charge | 2,298 | - | ||||||
| Non-cash net interest expense | 700 | 770 | ||||||
| Change in the fair value of warrants and equity method investments | 190 | 2,824 | ||||||
| Income tax effect related to reconciling items | (4,002 | ) | (10,622 | ) | ||||
| Income tax charge related to 2017 income tax reform (1) | - | 21,453 | ||||||
| Other-than-temporary impairment of equity method investment | - | 10,471 | ||||||
| Non-GAAP Net Income | $ | 97,836 | $ | 27,791 | ||||
| (1) - On December 22, 2017, the Tax Cuts and Jobs Act of 2017 was signed into law and has resulted in significant changes to the U.S. corporate income tax system including a federal corporate rate reduction from 35% to 21%. The change in tax rate and tax law is accounted for in the period of enactment. Therefore, during the period ended December 31, 2017, we recorded a $21.5 million tax expense related to our current estimate of the provisions of the Tax Cuts and Jobs Act of 2017. |
| Alkermes plc and Subsidiaries | ||||||||
| Selected Financial Information (Unaudited) | ||||||||
| Condensed Consolidated Balance Sheets | December 31, | December 31, | ||||||
| (In thousands) | 2018 | 2017 | ||||||
| Cash, cash equivalents and total investments | $ | 620,039 | $ | 590,716 | ||||
| Receivables | 292,223 | 233,590 | ||||||
| Contract assets | 8,230 | - | ||||||
| Inventory | 90,196 | 93,275 | ||||||
| Prepaid expenses and other current assets | 53,308 | 48,475 | ||||||
| Property, plant and equipment, net | 309,987 | 284,736 | ||||||
| Intangible assets, net and goodwill | 283,874 | 349,041 | ||||||
| Other assets | 167,150 | 197,394 | ||||||
| Total Assets | $ | 1,825,007 | $ | 1,797,227 | ||||
| Long-term debt - current portion | $ | 2,843 | $ | 3,000 | ||||
| Other current liabilities | 336,931 | 288,122 | ||||||
| Long-term debt | 276,465 | 278,436 | ||||||
| Contract liabilities - long-term | 9,525 | 5,657 | ||||||
| Other long-term liabilities | 27,958 | 19,204 | ||||||
| Total shareholders' equity | 1,171,285 | 1,202,808 | ||||||
| Total Liabilities and Shareholders' Equity | $ | 1,825,007 | $ | 1,797,227 | ||||
| Ordinary shares outstanding (in thousands) | 155,757 | 154,009 | ||||||
| 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, 2018, which the company intends to file in February 2019. |
| Alkermes plc and Subsidiaries | ||||||||||||||||||||
| Revenues for Calendar Year 2018 and 2017 | ||||||||||||||||||||
| 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 | |||||||||||||||
| AMPYRA/FAMPYRA | 28,259 | 19,678 | 20,339 | 38,778 | 107,054 | |||||||||||||||
| BYDUREON | 9,749 | 13,510 | 11,944 | 10,572 | 45,775 | |||||||||||||||
| Key Commercial Product Revenues | 198,640 | 228,176 | 225,520 | 263,372 | 915,708 | |||||||||||||||
| Legacy Product Revenues | 7,803 | 9,872 | 6,926 | 36,700 | 61,301 | |||||||||||||||
| License Revenue (2) | - | 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 | ||||||||||
| 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) | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||
| Revenues: | ||||||||||||||||||||
| PARTNERED LONG-ACTING ANTIPSYCHOTICS (1) | $ | 60,003 | $ | 82,169 | $ | 79,443 | $ | 78,238 | $ | 299,853 | ||||||||||
| VIVITROL | 58,456 | 66,071 | 69,178 | 75,617 | 269,322 | |||||||||||||||
| ARISTADA | 18,000 | 22,685 | 24,503 | 28,324 | 93,512 | |||||||||||||||
| AMPYRA/FAMPYRA | 29,219 | 25,256 | 24,478 | 38,066 | 117,019 | |||||||||||||||
| BYDUREON | 12,266 | 11,635 | 10,095 | 11,700 | 45,696 | |||||||||||||||
| Key Commercial Product Revenues | 177,944 | 207,816 | 207,697 | 231,945 | 825,402 | |||||||||||||||
| Legacy Product Revenues | 13,191 | 10,192 | 8,661 | 10,696 | 42,740 | |||||||||||||||
| License Revenue (3) | - | - | - | 28,000 | 28,000 | |||||||||||||||
| Research and Development Revenues | 643 | 833 | 1,027 | 4,729 | 7,232 | |||||||||||||||
| Total Revenues | $ | 191,778 | $ | 218,841 | $ | 217,385 | $ | 275,370 | $ | 903,374 | ||||||||||
| (1) - Includes RISPERDAL CONSTA, INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA. | ||||||||||||||||||||
| (2) - Includes a milestone payment allocated to the license sold to Biogen in connection with the BIIB098 collaboration. | ||||||||||||||||||||
| (3) - Includes the upfront payment allocated to the license sold to Biogen in connection with the BIIB098 collaboration. |
| Alkermes plc and Subsidiaries | ||||||||||||
| 2019 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: | ||||||||||||
| 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 | $ | (165.0 | ) | 156 | $ | (1.06 | ) | |||||
| Adjustments: | ||||||||||||
| Share-based compensation expense | 120.0 | |||||||||||
| Amortization expense | 55.0 | |||||||||||
| Depreciation expense | 40.0 | |||||||||||
| Non-cash net interest expense | 1.0 | |||||||||||
| Income tax effect related to reconciling items | 4.0 | |||||||||||
| Projected Net Income - Non-GAAP | $ | 55.0 | 161 | $ | 0.34 | |||||||
| Projected GAAP and non-GAAP measures reflect mid-points within ranges of estimated guidance. |