Alkermes plc (Nasdaq: ALKS) today reported financial results for the quarter and year ended Dec. 31, 2021 and provided financial expectations for 2022.
-- Revenues of $1.17 Billion in 2021, GAAP Loss per Share of $0.30 and Diluted Non-GAAP Earnings per Share of $0.78 --
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| [16-February-2022] |
| DUBLIN, Feb. 16, 2022 /PRNewswire/ -- Alkermes (Nasdaq: ALKS) today reported financial results for the quarter and year ended Dec. 31, 2021 and provided financial expectations for 2022. “In 2021, we made significant progress against our strategic priorities of growing our commercial business, expanding and advancing our development pipeline and driving profitability,” said Richard Pops, Chief Executive Officer of Alkermes. “The year was highlighted by the FDA approval and our commercial launch of our oral atypical antipsychotic, LYBALVI®, which joined ARISTADA®, our long-acting injectable antipsychotic, in our psychiatry franchise. We drove new growth with VIVITROL® in the alcohol dependence indication. We met important pipeline milestones, initiating potential registration-enabling studies for nemvaleukin and advancing our HDAC inhibitor and orexin development candidates. In 2022, we are focused on execution as we advance the commercial launch of LYBALVI, enroll our nemvaleukin clinical studies, demonstrate disciplined allocation of capital and manage the business to drive long-term profitability and value creation for our shareholders.” Quarter Ended Dec. 31, 2021 Financial Highlights - Total revenues for the quarter were $324.5 million. This compared to $280.0 million for the same period in the prior year. - Total operating expenses for the quarter were $322.1 million. This compared to $310.7 million for the same period in the prior year. - Net income according to generally accepted accounting principles in the United States (GAAP) was $0.9 million for the quarter, or a basic and diluted GAAP earnings per share of $0.01. This compared to GAAP net loss of $42.6 million, or a basic and diluted GAAP loss per share of $0.27, for the same period in the prior year. - Non-GAAP net income was $38.5 million for the quarter, or a non-GAAP basic earnings per share of $0.24 and diluted earnings per share of $0.23. This compared to non-GAAP net income of $16.5 million, or a non-GAAP basic and diluted earnings per share of $0.10 for the same period in the prior year. Year Ended Dec. 31, 2021 Financial Results Revenues - Total revenues for the year were $1.17 billion. This compared to $1.04 billion in the prior year. - Net sales of proprietary products for the year were $627.4 million, compared to $551.8 million in the prior year.
- Manufacturing and royalty revenues for the year were $541.8 million, compared to $484.0 million in the prior year.
Costs and Expenses - Total operating expenses for the year were $1.20 billion, compared to $1.15 billion in the prior year.
Profitability - GAAP net loss for the year was $48.2 million, or a basic and diluted GAAP loss per share of $0.30 and included the $25.0 million development milestone. This compared to GAAP net loss of $110.9 million, or a basic and diluted GAAP loss per share of $0.70, in the prior year. - Non-GAAP net income for the year was $129.1 million, or a non-GAAP basic earnings per share of $0.80 and diluted earnings per share of $0.78 and included the $25.0 million development milestone. This compared to non-GAAP net income of $68.6 million, or a non-GAAP basic and diluted earnings per share of $0.43, in the prior year. Balance Sheet - At Dec. 31, 2021, Alkermes recorded cash, cash equivalents and total investments of $765.7 million, compared to $659.8 million at Dec. 31, 2020, driven primarily by the company’s operating results and changes in working capital. The company’s total debt outstanding as of Dec. 31, 2021 was $295.8 million. “In 2021, we managed the business to achieve the high end of our overall financial expectations, as we drove topline growth, continued to optimize our cost structure and focused on operational efficiencies. At the same time, we invested in key strategic priorities including the launch of LYBALVI and the nemvaleukin development program,” commented Iain Brown, Chief Financial Officer of Alkermes. “We enter 2022 in a solid financial position. Our financial expectations for the year reflect our continued focus on driving the growth of our proprietary products and disciplined capital allocation focused on opportunities with high potential return on investment in support of the company’s strategy and to drive shareholder value creation.” Financial Expectations for 2022 The following financial expectations for 2022 assume improvement in COVID-19 pandemic-related disruptions, beginning in the second quarter. If current disruptions do not decrease as anticipated, or if new COVID-19-related disruptions emerge, the company’s ability to meet these expectations could be negatively impacted. These financial expectations also reflect removal of all royalties from worldwide sales of the long-acting INVEGA products beginning in 2022. Alkermes has, to date, only received notice of partial termination relating to royalties from the long-acting INVEGA products in the U.S., after January 2022. Alkermes has not received a notice of termination from Janssen in respect of any markets outside the U.S. However, for financial planning purposes only, the company has decided to remove all royalties related to sales in markets outside the U.S. after May 2022. Alkermes continues to disagree with the position taken by Janssen and is prepared to pursue all options at its disposal to enforce its contractual rights and address any unauthorized use of its intellectual property. All line items are according to GAAP, except as otherwise noted.
Mr. Brown continued, “Over the last several years, we have worked to position the business such that our topline performance will be fueled primarily by the growth of our proprietary products. We estimate that the early termination of the Janssen license agreement in the United States and the impact of its potential termination outside the United States would together reduce our total revenues by approximately $260 million in 2022. From an operational perspective, we have adapted our budget, recognizing that even if we are able to favorably resolve our situation with Janssen, that resolution could take time. Today we are updating our long-term profitability targets to reflect exclusion of worldwide royalties from the long-acting INVEGA products. In the event that the situation with Janssen resolves in a manner favorable to Alkermes, or Janssen does not terminate our license agreement in markets outside the U.S., we would be positioned to accelerate the achievement of these targets. The revised profitability targets that we are announcing today reflect feedback from many of our institutional shareholders, our commitment to continued expense management and our focus on driving long-term profitability.” Profitability Targets The company today updated its long-term profitability targets to reflect the removal of all royalty revenues related to sales of the long-acting INVEGA products in the U.S. after January 2022 and outside the U.S. after May 2022. The company is not providing reconciliations of, or comparable GAAP measures for, the following updated non-GAAP profitability targets, as they are not determinable without unreasonable efforts.* The company is committed to achieving:
As a bridge to these long-term profitability targets, the company expects to achieve non-GAAP net income in the range of 15% to 20% of the company’s total revenues in FY 2024. Recent Events: Psychiatry and Addiction
Oncology
Neuroscience
Corporate
Other
Conference Call Alkermes will host a conference call and webcast presentation with accompanying slides at 8:00 a.m. ET (1:00 p.m. GMT) on Wednesday, Feb. 16, 2022, 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 Wednesday, Feb. 16, 2022, through Wednesday, Feb. 23, 2022, 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 13726455. About Alkermes plc 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 alcohol dependence, opioid dependence, schizophrenia and bipolar I disorder, and a pipeline of product candidates in development for neurodegenerative disorders and cancer. Headquartered in Dublin, Ireland, Alkermes 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), non-GAAP basic and diluted earnings (loss) per share, non-GAAP net income margin (non-GAAP net income/total revenue) and EBITDA margin (EBITDA/total revenue). 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 certain 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. 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 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), non-GAAP basic and diluted earnings (loss) per share, non-GAAP net income margin and EBITDA margin 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), non-GAAP basic and diluted earnings (loss) per share, non-GAAP net income margin and EBITDA margin 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. *The company has not provided full financial expectations for time periods after the year ending Dec. 31, 2022 and therefore is not providing reconciliations of, or comparable GAAP measures for, non-GAAP net income margins or EBITDA margins, for time periods after the year ending Dec. 31, 2022. Reconciliations of such forward-looking non-GAAP profitability measures to comparable GAAP measures are not determinable without unreasonable efforts due to the inherent difficulty in forecasting and quantifying certain future financial amounts necessary for such reconciliations, which amounts could have a significant impact on the company’s future financial results, including such non-GAAP profitability measures and the comparable GAAP financial measures. 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 plans to drive growth, long-term profitability and shareholder value creation and the company’s profitability targets and its ability to achieve such targets; the potential impacts on the company of Janssen’s notice of partial termination; the company’s expectations of improvement in COVID-19-related disruptions; the potential therapeutic and commercial value of the company’s marketed and development products; the company’s expectations concerning its future development activities and commercial activities, including in respect of investments in the company’s development pipeline and the 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 may not be able to achieve its revised financial and 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 and patient and healthcare provider access to the company’s commercial products; the unfavorable outcome of arbitration or litigation, including so-called “Paragraph IV” litigation and other patent litigation, 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) may not agree with the company’s regulatory approval strategies or components of the company’s marketing applications or the adequacy of the data and other information included in its submissions to support the FDA’s requirements for approval; 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; the company and its licensees may not be able to continue to successfully commercialize their products or support growth of revenue 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 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®, ARISTADA INITIO® and LYBALVI® are registered trademarks of Alkermes Pharma Ireland Limited, used by Alkermes, Inc. under license; RISPERDAL CONSTA®, INVEGA SUSTENNA®, XEPLION®, INVEGA TRINZA®, TREVICTA®, and INVEGA HAFYERA® are registered trademarks of Johnson & Johnson Company; VUMERITY® is a registered trademark of Biogen MA Inc., used by Alkermes under license; and KEYTRUDA® is a registered trademark of Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc., Kenilworth, NJ, USA. Important Additional Information and Where to Find It The company intends to file a definitive proxy statement, accompanying proxy card and other relevant documents with the SEC in connection with the solicitation of proxies for the company’s 2022 Annual General Meeting of Shareholders. BEFORE MAKING ANY VOTING DECISION, SHAREHOLDERS OF THE COMPANY ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH OR FURNISHED TO THE SEC, INCLUDING THE COMPANY’S DEFINITIVE PROXY STATEMENT AND ANY AMENDMENTS AND SUPPLEMENTS THERETO, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and shareholders will be able to obtain a copy of the definitive proxy statement and other documents filed by the company with the SEC free of charge from the SEC’s website at www.sec.gov. In addition, copies will be available at no charge by visiting the “Investors” section of the company’s website at www.alkermes.com, as soon as reasonably practicable after such materials are filed with, or furnished to, the SEC. Certain Information Regarding Participants in the Solicitation The company, its directors and certain of its executive officers are participants in the solicitation of proxies from shareholders in respect of the company’s 2022 Annual General Meeting of Shareholders. Information regarding the names of such participants and their respective interests in the company by security holdings or otherwise is set forth in the company’s Form 10-K for the year ended Dec. 31, 2021, to be filed with the SEC on or around Feb. 16, 2022; the company’s definitive proxy statement for the company’s 2021 Annual General Meeting of Shareholders, filed with the SEC on May 10, 2021; the company’s Current Reports on Form 8-K filed with the SEC from time to time; and in Initial Statements of Beneficial Ownership on Form 3 or Statements of Change in Ownership on Form 4 filed with the SEC from time to time. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the direct and indirect interests of these participants, by security holdings or otherwise, will also be included in the definitive proxy statement for the company’s 2022 Annual General Meeting of Shareholders and other relevant materials to be filed with the SEC, if and when they become available. (tables follow)
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Company Codes: NASDAQ-NMS:ALKS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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