Alkermes plc (NASDAQ: ALKS) today reported financial results for the first quarter of 2014.
"During the quarter, we continued to generate positive cash flow, reflecting the strength of our commercial business and enabling us to invest in our advancing late-stage pipeline and prepare for the launch of aripiprazole lauroxil," commented James Frates, Chief Financial Officer of Alkermes. "With more than $700 million in cash and investments and a cash-generating commercial portfolio, Alkermes is well-positioned to build our business. The business continues to perform as we planned, and today we are reiterating the financial expectations for 2014 that we provided in February."
"In early April, we announced the positive phase 3 data for aripiprazole lauroxil. With these data now in hand, the company is on track to submit the NDA in the third quarter, and we are accelerating our preparations for commercial launch in 2015," said Richard Pops, Chief Executive Officer of Alkermes. "These data mark the beginning of a steady stream of clinical results to emerge from the Alkermes pipeline and solidify our position as an R&D innovator. We believe Alkermes controls one of the most exciting CNS pipelines in the industry, backed by a strong financial engine that enables us to invest in our future growth, and we look forward to data for three additional candidates within the next 12 months: ALKS 3831, ALKS 8700 and ALKS 7106."
Quarter Ended March 31, 2014 Highlights
Total revenues for the quarter were $130.2 million, compared to $163.4 million for the same period in the prior year, which included $30.0 million of intellectual property license revenue unrelated to key development programs.
Non-GAAP net income was $16.2 million, or a non-GAAP diluted earnings per share (EPS) of $0.11 for the quarter. This compared to non-GAAP net income of $56.3 million, or a non-GAAP diluted EPS of $0.40, for the same period in the prior year, which included $30.0 million, or $0.21 per diluted share, of intellectual property license revenue.
GAAP net loss was $24.4 million, or a basic and diluted GAAP loss per share of $0.17, for the quarter. This compared to GAAP net income of $3.0 million, or a basic and diluted GAAP EPS of $0.02, for the same period in the prior year, which included $30.0 million, or $0.21 per diluted share, of intellectual property license revenue and one-time restructuring charges of $12.3 million, or $0.09 per diluted share.
Free cash flow was $10.5 million for the quarter, compared to $48.0 million for the same period in the prior year, which included $30.0 million of intellectual property license revenue.
Quarter Ended March 31, 2014 Financial Results
Manufacturing and royalty revenues from the company's long-acting atypical antipsychotic franchise, RISPERDAL® CONSTA® and INVEGA® SUSTENNA®/XEPLION®, were $49.6 million, compared to $45.6 million for the same period in the prior year, representing an increase of approximately 9%.
Manufacturing and royalty revenues from AMPYRA®/FAMPYRA®1 were $20.6 million, compared to $24.7 million for the same period in the prior year.
Net sales of VIVITROL® were $17.1 million, compared to $14.6 million for the same period in the prior year, representing an increase of approximately 17%.
Royalty revenue from BYDUREON® was $7.7 million, compared to $4.8 million for the same period in the prior year.
Additionally, results for the quarter ended March 31, 2014 included RITALIN LA®/FOCALIN XR® revenues of $9.7 million, VERELAN® revenues of $4.6 million and TRICOR® 145 revenues of $2.3 million. This compared to RITALIN LA/FOCALIN XR revenues of $10.6 million, VERELAN revenues of $6.7 million and TRICOR 145 revenues of $6.2 million for the same period in the prior year.
Costs and Expenses
Operating expenses were $146.1 million, reflecting increased investment in the company's rapidly advancing central nervous system (CNS) development pipeline and prelaunch activities for aripiprazole lauroxil. This compared to $144.4 million for the same period in the prior year, which included $12.3 million in one-time restructuring charges related to the Athlone, Ireland manufacturing facility.
Income tax provision was $3.8 million, compared to $4.9 million for the same period in the prior year.
At March 31, 2014, Alkermes had cash and total investments of $701.8 million, compared to $450.0 million at Dec. 31, 2013. Cash and investments at March 31, 2014 included gross proceeds of $250.0 million related to the sale of 5,917,160 of Alkermes' ordinary shares to Invesco Perpetual Funds through a registered direct offering, which closed on Jan. 16, 2014. At March 31, 2014, the company's total debt outstanding was $362.7 million.
Alkermes reiterates all of its financial expectations for 2014 set forth in its press release dated Feb. 27, 2014.
Alkermes will host a conference call at 8:30 a.m. EDT (1:30 p.m. BST) on Wednesday, April 30, 2014, to discuss these financial results and provide an update on the company. The conference call may be accessed 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. EDT (4:00 p.m. BST) on Wednesday, April 30, 2014, through 5:00 p.m. EDT (10:00 p.m. BST) on Wednesday, May 7, 2014, 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 that applies its scientific expertise and proprietary technologies to develop innovative medicines that improve patient outcomes. The company has a diversified portfolio of more than 20 commercial drug products and a substantial clinical pipeline of product candidates that address central nervous system (CNS) disorders such as addiction, schizophrenia and depression. Headquartered in Dublin, Ireland, Alkermes plc has an R&D center in Waltham, Massachusetts; a research and manufacturing facility in Athlone, Ireland; and manufacturing facilities in Gainesville, Georgia and 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, non-GAAP diluted earnings per share and free cash flow. 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.
Management defines its non-GAAP financial measures as follows:
Non-GAAP net income adjusts for one-time and non-cash charges by excluding from GAAP results: share-based compensation expense; amortization; depreciation; non-cash net interest expense; non-cash tax expense; deferred revenue; and certain other one-time or non-cash items.
Free cash flow represents non-GAAP net income less capital expenditures.
Management believes that these non-GAAP financial measures, when viewed with its results under GAAP and the accompanying reconciliations, better indicate underlying trends in ongoing operations and cash flows. However, non-GAAP net income, non-GAAP diluted earnings per share and free cash flow are not measures of financial performance under GAAP and, accordingly, should not be considered as alternatives to GAAP measures as indicators of operating performance.
A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables included in this press release.
Source: Alkermes, Inc.