Alkermes today reported financial results for the twelve months ended Dec. 31, 2017 and provided financial expectations for 2018.
-- Record Revenues of $903.4 Million, GAAP Loss Per Share of $1.03 and Non-GAAP Diluted Earnings Per Share of $0.17 Reported for 2017 --
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DUBLIN, Feb. 14, 2018 /PRNewswire/ -- Alkermes (Nasdaq: ALKS) today reported financial results for the twelve months ended Dec. 31, 2017 and provided financial expectations for 2018. Quarter Ended Dec. 31, 2017 Financial Highlights
Quarter Ended Dec. 31, 2017 Financial Results Revenues
Costs and Expenses
Calendar Year 2017 Financial Highlights
"Our financial results in 2017 were driven by the strong year-over-year growth of our proprietary products, VIVITROL and ARISTADA, our base royalty and manufacturing business and our strategic alliance with Biogen for BIIB098. We exited the year well positioned to execute on our key strategic initiatives in 2018," commented James Frates, Chief Financial Officer of Alkermes. "Looking ahead, 2018 will be a transformative year for Alkermes. Our financial expectations for 2018 reflect important investments that will drive future value as we advance our late-stage pipeline and prepare for the anticipated launch of ALKS 5461, with the planned expansion of our commercial organization midyear. We also expect solid growth for VIVITROL and ARISTADA, and remain committed to driving awareness and advancing the treatment paradigm for these important medicines." Recent Events:
"We are making significant progress in advancing our pipeline of late-stage CNS development candidates, highlighted by the recent submission of the ALKS 5461 NDA, the recently announced license and collaboration agreement with Biogen to develop and commercialize BIIB098, and as we near completion of enrollment in the six-month pivotal weight study for ALKS 3831," said Richard Pops, Chief Executive Officer of Alkermes. "Alkermes has worked for many years toward this moment. With a diversified CNS business and significant news flow expected across our pipeline of development candidates in 2018, we are focused on executing on our business strategy to bring these important potential new medicines to patients and creating value for our shareholders." 2018 Expected Milestones The following outlines the company's expected milestones for 2018. The following statements are forward-looking, and actual results may differ materially. Please see "Note Regarding Forward-Looking Statements" at the end of this press release for risks that could cause results to differ materially from these forward-looking statements.
Financial Expectations for 2018 The following outlines the company's financial expectations for 2018, which include investments in commercial infrastructure in preparation for the expected launch of ALKS 5461 and in the company's pipeline of late-stage development candidates. The following statements are forward-looking, and actual results may differ materially. Please see "Note Regarding Forward-Looking Statements" at the end of this press release for risks that could cause results to differ materially from these forward-looking statements.
Conference Call Alkermes will host a conference call at 8:30 a.m. ET (1:30 p.m. GMT) on Wednesday, Feb. 14, 2018, to discuss these financial results and provide an update on the company. The conference call may be accessed by visiting Alkermes' website or by dialing +1 888 424 8151 for U.S. callers and +1 847 585 4422 for international callers. The conference call ID number is 6037988. 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. 14, 2018, through 5:00 p.m. ET (10:00 p.m. GMT) on Wednesday, Feb. 21, 2018, and may be accessed by visiting Alkermes' website or by dialing +1 888 843 7419 for U.S. callers and +1 630 652 3042 for international callers. The replay access code is 6037988. About Alkermes plc 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: future financial and operating performance, business plans or prospects; the likelihood of continued revenue growth from the company's commercial products, including the growth of VIVITROL and ARISTADA; the therapeutic and commercial value of the company's marketed and development products and patient access to such products; expectations concerning the timing and results of clinical development activities, including the timing of the phase 3 clinical trial enrollment completion and data readout for ALKS 3831, the timing of the presentation of ALKS 3831 phase 1 metabolic study data, the phase 1 data readout and timing of development activities for ALKS 4230, the timing of data from the EVOLVE-MS-2 head-to-head gastrointestinal study and the potential $50 million option payment by Biogen, the submission of the NDA for BIIB098, the acceptance of the NDA for ALKS 5461 by the FDA, and the timing of FDA review of the NDA for ALKS 5461; and expectations concerning the timing and results of commercial activities, including the expected launch of ALKS 5461. 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, 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, such as 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 NanoCrystal® are registered trademarks of Alkermes Pharma Ireland Limited; RISPERDAL CONSTA®, INVEGA SUSTENNA®, XEPLION®, INVEGA TRINZA® and TREVICTA® are registered trademarks of Johnson & Johnson; AMPYRA® and FAMPYRA® are registered trademarks of Acorda Therapeutics, Inc. 1AMPYRA® (dalfampridine) Extended Release Tablets, 10 mg is developed and marketed in the U.S. by Acorda Therapeutics, Inc. and outside the U.S. by Biogen Idec, under a licensing agreement with Acorda Therapeutics, as FAMPYRA® (prolonged-release fampridine tablets). (tables follow)
Alkermes plc and Subsidiaries
Selected Financial Information (Unaudited)
Three Months Three Months
Ended Ended
Condensed Consolidated Statements of Operations - GAAP December 31, December 31,
(In thousands, except per share data) 2017 2016
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Revenues:
Manufacturing and royalty revenues $138,700 $133,804
Product sales, net 103,941 79,451
License revenues 28,000 -
Research and development revenues 4,729 259
Total Revenues 275,370 213,514
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Expenses:
Cost of goods manufactured and sold 38,507 34,957
Research and development 104,490 89,626
Selling, general and administrative 110,896 97,145
Amortization of acquired intangible assets 15,642 15,323
Total Expenses 269,535 237,051
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Operating Income (Loss) 5,835 (23,537)
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Other Income (Expense), net:
Interest income 1,362 835
Interest expense (3,192) (4,896)
Change in the fair value of contingent consideration 5,700 4,800
Other income (expense), net 1,081 (1,515)
Total Other Income (Expense), net 4,951 (776)
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Income (Loss) Before Income Taxes 10,786 (24,313)
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Provision (Benefit) for Income Taxes 20,575 (3,172)
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Net Loss - GAAP $(9,789) $(21,141)
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Net (Loss) Earnings Per Share:
GAAP net loss per share - basic and diluted $(0.06) $(0.14)
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Non-GAAP earnings per share - basic $0.33 $0.15
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Non-GAAP earnings per share - diluted $0.31 $0.15
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Weighted Average Number of Ordinary Shares Outstanding:
Basic and diluted - GAAP 153,865 152,148
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Basic - Non-GAAP 153,865 152,148
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Diluted - Non-GAAP 160,036 159,212
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An itemized reconciliation between net loss on a GAAP basis and non-GAAP net income is as follows:
Net Loss - GAAP $(9,789) $(21,141)
Adjustments:
Share-based compensation expense 20,581 19,783
Amortization expense 15,642 15,323
Depreciation expense 9,575 9,325
Income tax charge related to 2017 income tax reform (1) 21,453 -
Non-cash net interest expense 192 194
Loss on warrants and equity method investments 64 866
Income tax effect related to reconciling items (1,726) 1,636
Change in the fair value of contingent consideration (5,700) (4,800)
Loss on debt refinancing - 2,075
Non-GAAP Net Income $50,292 $23,261
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Year Ended Year Ended
Condensed Consolidated Statements of Operations - GAAP December 31, December 31,
(In thousands, except per share data) 2017 2016
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Revenues:
Manufacturing and royalty revenues $505,308 $487,247
Product sales, net 362,834 256,146
License revenues 28,000 -
Research and development revenues 7,232 2,301
Total Revenues 903,374 745,694
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Expenses:
Cost of goods manufactured and sold 154,748 132,122
Research and development 412,889 387,148
Selling, general and administrative 421,578 374,130
Amortization of acquired intangible assets 62,059 60,959
Total Expenses 1,051,274 954,359
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Operating Loss (147,900) (208,665)
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Other Income (Expense), net:
Interest income 4,649 3,752
Interest expense (12,008) (14,889)
Change in the fair value of contingent consideration 21,600 7,900
Other expense, net (9,615) (2,485)
Total Other Income (Expense), net 4,626 (5,722)
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Loss Before Income Taxes (143,274) (214,387)
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Provision (Benefit) for Income Taxes 14,671 (5,943)
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Net Loss - GAAP $(157,945) $(208,444)
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Net (Loss) Earnings Per Share:
GAAP net loss per share - basic and diluted $(1.03) $(1.38)
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Non-GAAP earnings (loss) per share - basic $0.18 $(0.07)
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Non-GAAP earnings (loss) per share - diluted $0.17 $(0.07)
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Weighted Average Number of Ordinary Shares Outstanding:
Basic and diluted - GAAP 153,415 151,484
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Basic - Non-GAAP 153,415 151,484
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Diluted - Non-GAAP 160,062 151,484
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An itemized reconciliation between net loss on a GAAP basis and non-GAAP net income (loss) is as follows:
Net Loss - GAAP $(157,945) $(208,444)
Adjustments:
Share-based compensation expense 83,917 94,396
Amortization expense 62,059 60,958
Depreciation expense 36,464 33,298
Income tax charge related to 2017 income tax reform (1) 21,453 -
Other-than-temporary impairment of equity method investment 10,471 -
Loss on warrants and equity method investments 2,824 2,130
Non-cash net interest expense 770 888
Income tax effect related to reconciling items (10,622) 2,252
Change in the fair value of contingent consideration (21,600) (7,900)
Upfront license option payment to Reset Therapeutics, Inc. charged to R&D expense - 10,000
Loss on debt refinancing - 2,075
Non-GAAP Net Income (Loss) $27,791 $(10,347)
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(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.
Condensed Consolidated Balance Sheets December 31, December 31,
(In thousands) 2017 2016
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Cash, cash equivalents and total investments $590,716 $619,165
Receivables 233,590 191,102
Inventory 93,275 62,998
Prepaid expenses and other current assets 48,475 39,344
Property, plant and equipment, net 284,736 264,785
Intangible assets, net and goodwill 349,041 411,100
Other assets 197,394 137,929
Total Assets $1,797,227 $1,726,423
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Long-term debt - current portion $3,000 $3,000
Other current liabilities 288,122 208,993
Long-term debt 278,436 280,666
Deferred revenue - long-term 5,657 7,122
Other long-term liabilities 19,204 17,161
Total shareholders' equity 1,202,808 1,209,481
Total Liabilities and Shareholders' Equity $1,797,227 $1,726,423
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Ordinary shares outstanding (in thousands) 154,009 152,431
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, 2017, which the company intends to file in February 2018.
Alkermes plc and Subsidiaries
Revenues for Calendar Year 2017 and 2016
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
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Revenues:
PARTNERED LONG-ACTING ANTIPSYCHOTICS (1) $60,003 $82,169 $79,443 $78,238 $299,853
AMPYRA/FAMPYRA 29,219 25,256 24,478 38,066 117,019
BYDUREON 12,266 11,635 10,095 11,700 45,696
VIVITROL 58,456 66,071 69,178 75,617 269,322
ARISTADA 18,000 22,685 24,503 28,324 93,512
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Key Commercial Product Revenues 177,944 207,816 207,697 231,945 825,402
Legacy Product Revenues (2) 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
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Total Revenues $191,778 $218,841 $217,385 $275,370 $903,374
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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) 2016 2016 2016 2016 2016
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Revenues:
PARTNERED LONG-ACTING ANTIPSYCHOTICS (1) $54,667 $69,578 $73,251 $73,967 $271,463
AMPYRA/FAMPYRA 28,194 40,848 12,897 32,254 114,193
BYDUREON 10,533 12,303 11,554 11,256 45,646
VIVITROL 43,827 47,242 55,804 62,109 208,982
ARISTADA 5,547 10,277 13,998 17,342 47,164
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Key Commercial Product Revenues 142,768 180,248 167,504 196,928 687,448
Legacy Product Revenues (2) 12,765 14,305 12,548 16,327 55,945
Research and Development Revenues 1,241 612 189 259 2,301
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Total Revenues $156,774 $195,165 $180,241 $213,514 $745,694
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(1) - Includes RISPERDAL CONSTA, INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA.
(2) - Includes legacy product revenues, excluding product revenues sold as part of the Gainesville transaction.
(3) - Includes the upfront payment allocated to the license sold to Biogen in connection with the BIIB098 collaboration.
Alkermes plc and Subsidiaries
2018 Guidance - GAAP to Non-GAAP Adjustments
An itemized reconciliation between projected loss per share on a GAAP basis and projected loss per share
on a non-GAAP basis is as follows:
(In millions, except per share data) Amount Shares Loss Per Share
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Projected Net Loss - GAAP $(265.0) 155 $(1.71)
Adjustments:
Non-cash net interest expense 1.0
Income tax effect related to reconciling items (3.5)
Depreciation expense 42.5
Amortization expense 65.0
Share-based compensation expense 140.0
Projected Net Loss - Non-GAAP $(20.0) 155 $(0.13)
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Projected GAAP and non-GAAP measures reflect mid-points within ranges of estimated guidance.
Alkermes Contacts: For Investors: Sandy Coombs +1 781 609 6377
Eva Stroynowski +1 781 609 6823
For Media: Jennifer Snyder +1 781 609
6166
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Company Codes: NASDAQ-NMS:ALKS |
