Alkermes plc Reports Second Quarter 2024 Financial Results

—    Second Quarter Revenues of $399.1 Million —

—    Net Sales of Proprietary Products Increased Approximately 16% Year-Over-Year —

—    GAAP Net Income from Continuing Operations of $94.7 Million and Diluted GAAP Earnings per Share from Continuing Operations of $0.55 —

—    Company Reiterates 2024 Financial Expectations —

DUBLIN, July 24, 2024 /PRNewswire/ -- Alkermes plc (Nasdaq: ALKS) today reported financial results for the second quarter of 2024.

"Our second quarter results reflect solid execution across our business, delivering double-digit, year-over-year growth for our proprietary commercial product portfolio and robust profitability. We enter the second half of the year in a strong financial position with clear operational priorities to drive the performance of our commercial portfolio and advance our neuroscience development pipeline, including the phase 2 program for ALKS 2680 in narcolepsy type 1 and type 2," said Richard Pops, Chief Executive Officer of Alkermes. "As a profitable, smid-cap biotech growth company with multiple commercial products and a development pipeline with significant value potential, we are executing our plan to become a leader in the field of neuroscience."

Key Financial Highlights

Revenues

(In millions)	Three Months Ended June 30,					Six Months Ended June 30,
	2024		2023			2024		2023
Total Revenues	$	399.1	$	617.4*		$	749.5	$	905.0*
Total Proprietary Net Sales	$	269.3	$	231.5		$	502.8	$	446.2
VIVITROL®	$	111.9	$	102.1		$	209.5	$	198.7
ARISTADA®i	$	86.0	$	82.4		$	164.9	$	162.5
LYBALVI®	$	71.4	$	47.0		$	128.4	$	85.0

 

Profitability

(In millions)	Three Months Ended June 30,					Six Months Ended June 30,
	2024		2023			2024		2023
GAAP Net Income From Continuing Operations	$	94.7	$	279.1		$	133.6	$	267.1
GAAP Net Loss From Discontinued Operations	$	(3.3)	$	(42.0)		$	(5.4)	$	(71.8)
GAAP Net Income	$	91.4	$	237.1*		$	128.2	$	195.2*
Non-GAAP Net Income From Continuing Operations	$	123.4	$	134.3		$	199.6	$	164.4
Non-GAAP Net Loss From Discontinued Operations	$	(3.3)	$	(40.0)		$	(5.4)	$	(67.7)
Non-GAAP Net Income	$	120.1	$	94.3		$	194.2	$	96.7
EBITDA From Continuing Operations	$	118.6	$	299.1		$	170.1	$	306.2
EBITDA From Discontinued Operations	$	(3.9)	$	(41.4)		$	(6.4)	$	(77.4)
EBITDA	$	114.7	$	257.7*		$	163.7	$	228.9*

*As a result of the successful resolution of the arbitration with Janssen Pharmaceutica N.V., the three months ended June 30, 2023 included approximately $245.5 million of back royalties (and related interest) related to U.S. net sales of long-acting INVEGA^® products (consisting of $195.4 million for 2022 and $50.1 million for the first quarter of 2023) that would ordinarily have been recognized in prior periods.

Revenue Highlights

LYBALVI

• Revenues for the quarter were $71.4 million.
• Revenues and total prescriptions for the quarter grew 52% and 44%, respectively, compared to the second quarter of 2023.

ARISTADAⁱ

• Revenues for the quarter were $86.0 million.
• New to brand prescriptions for the quarter grew 6% sequentially compared to the first quarter of 2024.  

VIVITROL

• Revenues for the quarter were $111.9 million.
• Revenues for the quarter grew 10% compared to the second quarter of 2023, driven by the alcohol dependence indication.

Manufacturing & Royalty Revenues

• Royalty revenues from INVEGA SUSTENNA^®/XEPLION^®, INVEGA TRINZA^®/TREVICTA^® and INVEGA HAFYERA^®/BYANNLI^® for the quarter were $78.7 million.
• VUMERITY^® manufacturing and royalty revenues for the quarter were $35.2 million.

Key Operating Expenses

Please see Note 1 below for details regarding discontinued operations.

(In millions)	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
R&D Expense – Continuing Operations	$	59.6	$	68.2	$	127.3	$	132.0
R&D Expense – Discontinued Operations	$	3.9	$	32.6	$	6.4	$	62.4
SG&A Expense – Continuing Operations	$	168.1	$	195.8	$	347.9	$	363.6
SG&A Expense – Discontinued Operations	$	-	$	9.5	$	-	$	16.1

Balance Sheet

At June 30, 2024, the company recorded cash, cash equivalents and total investments of $962.5 million, compared to $807.8 million at March 31, 2024. The company's total debt outstanding as of June 30, 2024 was $289.5 million.

Share Repurchase Program
During the second quarter of 2024, the company repurchased approximately 3.5 million of the company's ordinary shares under the share repurchase program authorized in February 2024, at a total purchase price of $84.7 million. As of June 30, 2024, the company had $315.3 million (exclusive of any fees, commissions or other expenses related to such repurchases) remaining under the program.

Financial Expectations for 2024
Alkermes reiterates its financial expectations for 2024, as set forth in its press release dated Feb. 15, 2024.

Recent Events

• In April 2024, the company announced positive topline results from the narcolepsy type 2 and idiopathic hypersomnia cohorts in its phase 1b proof-of-concept study evaluating ALKS 2680, the company's novel, investigational, oral orexin 2 receptor (OX2R) agonist in development as a once-daily treatment for narcolepsy.
• In April 2024, the company announced initiation of its Vibrance-1 phase 2 study of ALKS 2680 in patients with narcolepsy type 1.
• In May 2024, the company completed the sale of its development and manufacturing facility in Athlone, Ireland to Novo Nordisk. Alkermes received a cash payment for the facility and certain related assets of approximately $91 million.
• In May and June 2024, the company presented research related to its psychiatry franchise products—LYBALVI (olanzapine and samidorphan) and ARISTADA (aripiprazole lauroxil)—at several scientific conferences. The conferences included: American Psychiatric Association (APA) Annual Meeting, American Society of Clinical Psychopharmacology (ASCP) Annual Meeting, and Psych Congress Elevate.
• In June 2024, the company presented new research related to ALKS 2680 and narcolepsy, including new data from the full narcolepsy type 1 cohort in its phase 1b, proof-of-concept study evaluating ALKS 2680, at SLEEP 2024, the 38^th annual meeting of the Associated Professional Sleep Societies (APSS).

Notes and Explanations

1. The company determined that upon the separation of its oncology business, completed on Nov. 15, 2023, the oncology business met the criteria for discontinued operations in accordance with Financial Accounting Standards Board Accounting Standards Codification 205, Discontinued Operations. Accordingly, the accompanying selected financial information has been updated to present the results of the oncology business as discontinued operations for the three and six months ended June 30, 2023.

Conference Call
Alkermes will host a conference call and webcast presentation with accompanying slides at 8:00 a.m. ET (1:00 p.m. BST) on Wednesday, July 24, 2024, 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 [phone] for U.S. callers and [phone] for international callers. In addition, a replay of the conference call may be accessed by visiting Alkermes' website.

About Alkermes plc
Alkermes plc is a global biopharmaceutical company that seeks to develop innovative medicines in the field of neuroscience. The company has a portfolio of proprietary commercial products for the treatment of alcohol dependence, opioid dependence, schizophrenia and bipolar I disorder, and a pipeline of clinical and preclinical candidates in development for neurological disorders, including narcolepsy. Headquartered in Ireland, Alkermes also has a corporate office and research and development center in Massachusetts and a manufacturing facility in 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 and EBITDA. 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 adjusts for certain one-time and non-cash charges by excluding from GAAP results: share-based compensation expense; amortization; depreciation; non-cash net interest expense; change in the fair value of contingent consideration; certain other one-time or non-cash items; and the income tax effect of these reconciling items. EBITDA represents earnings before interest, tax, depreciation and amortization; earnings include share-based compensation expense.

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 financial 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 and EBITDA 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 and EBITDA should not be considered measures of the company's 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 its future financial and operating performance, business plans or prospects, including profitability; and the potential therapeutic and commercial value of ALKS 2680 and the company's development pipeline. 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: whether the company is able to sustain profitability; the unfavorable outcome of arbitration or litigation, including so-called "Paragraph IV" litigation and other patent litigation which may lead to competition from generic drug manufacturers, or other disputes related to the company's products or products using the company's proprietary technologies; 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 final results from such activities, results of future development activities or real-world results; the U.S. Food and Drug Administration (FDA)  or regulatory authorities outside the U.S. may make adverse decisions regarding the company's products; the company and its licensees may not be able to continue to successfully commercialize their products or support revenue growth from such 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 government 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, 2023 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^®, ARISTADA INITIO^® and LYBALVI^® are registered trademarks of Alkermes Pharma Ireland Limited, used by Alkermes, Inc. under license; BYANNLI^®, INVEGA^®, INVEGA HAFYERA^®, INVEGA SUSTENNA^®, INVEGA TRINZA^®, TREVICTA^® and XEPLION^® are registered trademarks of Johnson & Johnson or its affiliated companies; and VUMERITY^® is a registered trademark of Biogen MA Inc., used by Alkermes under license.

ⁱ The term "ARISTADA" as used in this press release refers to ARISTADA and ARISTADA INITIO^®, unless the context indicates otherwise.

 

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)		June 30, 2024		June 30, 2023
Revenues:
Product sales, net		$                 269,273		$                 231,477
Manufacturing and royalty revenues		129,858		385,913
Research and development revenue		—		7
Total Revenues		399,131		617,397
Expenses:
Cost of goods manufactured and sold		61,472		63,249
Research and development		59,649		68,225
Selling, general and administrative		168,113		195,756
Amortization of acquired intangible assets		14		8,898
Total Expenses		289,248		336,128
Operating Income		109,883		281,269
Other Income, net:
Interest income		10,735		6,769
Interest expense		(5,952)		(5,684)
Other income (expense), net		2,053		(525)
Total Other Income, net		6,836		560
Income Before Income Taxes		116,719		281,829
Income Tax Provision		22,061		2,728
Net Income From Continuing Operations		94,658		279,101
Loss From Discontinued Operations — Net of Tax		(3,300)		(42,036)
Net Income — GAAP		$                   91,358		$                 237,065
GAAP Earnings (Loss) Per Ordinary Share - Basic:
From continuing operations		$                       0.56		$                       1.68
From discontinued operations		$                     (0.02)		$                     (0.25)
From net income		$                       0.54		$                       1.43
GAAP Earnings (Loss) Per Ordinary Share - Diluted:
From continuing operations		$                       0.55		$                       1.63
From discontinued operations		$                     (0.02)		$                     (0.25)
From net income		$                       0.53		$                       1.38
Weighted Average Number of Ordinary Shares Outstanding:
Basic  — GAAP and Non-GAAP		168,321		166,279
Diluted — GAAP and Non-GAAP		170,977		171,553
Condensed Consolidated Statements of Operations - GAAP (Continued)		Three Months Ended		Three Months Ended
(In thousands, except per share data)		June 30, 2024		June 30, 2023
An itemized reconciliation between net income from continuing operations on a GAAP basis and EBITDA is as follows:
Net Income from Continuing Operations		$                   94,658		$                 279,101
Adjustments:
Depreciation expense		6,644		9,426
Amortization expense		14		8,898
Interest income		(10,735)		(6,769)
Interest expense		5,952		5,684
Income tax provision		22,061		2,728
EBITDA from Continuing Operations		118,594		299,068
EBITDA from Discontinued Operations		(3,913)		(41,388)
EBITDA		$                 114,681		$                 257,680
An itemized reconciliation between net income from continuing operations on a GAAP basis and non-GAAP net income is as follows:
Net Income from Continuing Operations		$                   94,658		$                 279,101
Adjustments:
Share-based compensation expense		20,601		27,187
Depreciation expense		6,644		9,426
Amortization expense		14		8,898
Non-cash net interest expense		114		115
Separation expense		813		5,857
Income tax effect related to reconciling items		2,060		816
Gain on sale of Athlone manufacturing facility		(1,462)		—
Final award in the Janssen arbitration (2022 back royalties and interest)		—		(197,092)
Non-GAAP Net Income from Continuing Operations		123,442		134,308
Non-GAAP Net Loss from Discontinued Operations		(3,300)		(40,031)
Non-GAAP Net Income		$                 120,142		$                   94,277
Non-GAAP diluted earnings per ordinary share from continuing operations		$                       0.72		$                       0.78
Non-GAAP diluted loss per ordinary share from discontinued operations		$                     (0.02)		$                     (0.23)
Non-GAAP diluted earnings per ordinary share from net income		$                       0.70		$                       0.55
Alkermes plc and Subsidiaries
Selected Financial Information (Unaudited)
Condensed Consolidated Statements of Operations - GAAP		Six Months Ended		Six Months Ended
(In thousands, except per share data)		June 30, 2024		June 30, 2023
Revenues:
Product sales, net		$                 502,809		$                 446,204
Manufacturing and royalty revenues		246,691		458,775
Research and development revenue		3		13
Total Revenues		749,503		904,992
Expenses:
Cost of goods manufactured and sold		120,116		121,413
Research and development		127,260		131,995
Selling, general and administrative		347,862		363,589
Amortization of acquired intangible assets		1,073		17,698
Total Expenses		596,311		634,695
Operating Income		153,192		270,297
Other Income, net:
Interest income		20,134		11,735
Interest expense		(11,930)		(10,972)
Other income (expense), net		2,235		(564)
Total Other Income, net		10,439		199
Income Before Income Taxes		163,631		270,496
Income Tax Provision		30,025		3,445
Net Income From Continuing Operations		133,606		267,051
Loss From Discontinued Operations — Net of Tax		(5,420)		(71,831)
Net Income — GAAP		$                 128,186		$                 195,220
GAAP Earnings (Loss) Per Ordinary Share - Basic:
From continuing operations		$                       0.79		$                       1.61
From discontinued operations		$                      (0.03)		$                      (0.43)
From net income		$                       0.76		$                       1.18
GAAP Earnings (Loss) Per Ordinary Share - Diluted:
From continuing operations		$                       0.78		$                       1.56
From discontinued operations		$                     (0.03)		$                      (0.42)
From net income		$                       0.75		$                       1.14
Weighted Average Number of Ordinary Shares Outstanding:
Basic  — GAAP and Non-GAAP		168,152		165,686
Diluted — GAAP and Non-GAAP		171,960		170,747
Condensed Consolidated Statements of Operations - GAAP (Continued)		Six Months Ended		Six Months Ended
(In thousands, except per share data)		June 30, 2024		June 30, 2023
An itemized reconciliation between net income from continuing operations on a GAAP basis and EBITDA is as follows:
Net Income from Continuing Operations		$                 133,606		$                 267,051
Adjustments:
Depreciation expense		13,641		18,810
Amortization expense		1,073		17,698
Interest income		(20,134)		(11,735)
Interest expense		11,930		10,972
Income tax provision		30,025		3,445
EBITDA from Continuing Operations		170,141		306,241
EBITDA from Discontinued Operations		(6,429)		(77,380)
EBITDA		$                 163,712		$                 228,861
An itemized reconciliation between net income from continuing operations on a GAAP basis and non-GAAP net income is as follows:
Net Income from Continuing Operations		$                 133,606		$                 267,051
Adjustments:
Share-based compensation expense		53,356		48,210
Depreciation expense		13,641		18,810
Amortization expense		1,073		17,698
Separation expense		1,240		9,640
Income tax effect related to reconciling items		(2,061)		(179)
Gain on sale of Athlone manufacturing facility		(1,462)		—
Final award in the Janssen arbitration (2022 back royalties and interest)		—		(197,092)
Non-cash net interest expense		228		231
Non-GAAP Net Income from Continuing Operations		199,621		164,369
Non-GAAP Net Loss from Discontinued Operations		(5,420)		(67,676)
Non-GAAP Net Income		$                 194,201		$                   96,693
Non-GAAP diluted earnings per ordinary share from continuing operations		$                       1.16		$                       0.96
Non-GAAP diluted loss per ordinary share from discontinued operations		$                     (0.03)		$                     (0.40)
Non-GAAP diluted earnings per ordinary share from net income		$                       1.13		$                       0.57

 

Alkermes plc and Subsidiaries
Selected Financial Information (Unaudited)
Condensed Consolidated Balance Sheets		June 30,		December 31,
(In thousands)		2024		2023
Cash, cash equivalents and total investments		$                           962,520		$                           813,378
Receivables		366,415		332,477
Inventory		194,731		186,406
Contract assets		3,492		706
Prepaid expenses and other current assets		101,435		98,166
Property, plant and equipment, net		222,738		226,943
Intangible assets, net and goodwill		83,945		85,018
Assets held for sale		—		94,260
Deferred tax assets		167,382		195,888
Other assets		104,184		102,981
Total Assets		$                        2,206,842		$                        2,136,223
Long-term debt — current portion		$                               3,000		$                               3,000
Other current liabilities		512,548		512,678
Long-term debt		286,459		287,730
Liabilities from discontinued operations		—		4,542
Other long-term liabilities		120,830		125,587
Total shareholders' equity		1,284,005		1,202,686
Total Liabilities and Shareholders' Equity		$                        2,206,842		$                        2,136,223
Ordinary shares outstanding (in thousands)		165,887		166,980
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 quarter ended June 30, 2024, which the company intends to file in July 2024.

 

Alkermes plc and Subsidiaries
Amounts Included in Discontinued Operations
(In thousands)		Three Months Ended March 31, 2024		Three Months Ended June 30, 2024		Six Months Ended June 30, 2024
Cost of goods manufactured and sold		$                         —		$                       —		$                         —
Research and development		2,516		3,913		6,429
Selling, general and administrative		—		—		—
Income tax benefit		(396)		(613)		(1,009)
Loss from discontinued operations, net of tax		$                    2,120		$                  3,300		$                  5,420
(In thousands)		Three Months Ended March 31, 2023		Three Months Ended June 30, 2023		Six Months Ended June 30, 2023
Cost of goods manufactured and sold		$                         11		$                       11		$                       22
Research and development		29,867		32,563		62,430
Selling, general and administrative		6,644		9,502		16,146
Income tax benefit		(6,727)		(40)		(6,767)
Loss from discontinued operations, net of tax		$                  29,795		$                42,036		$                71,831

 

Alkermes Contacts:
For Investors:	Sandy Coombs	[phone]
For Media:	Katie Joyce	[phone]

 

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