On July 27, 2022 Alkermes plc (Nasdaq: ALKS) reported financial results for the second quarter of 2022 and provided updated financial expectations for full-year 2022 (Press release, Alkermes, JUL 27, 2022, View Source [SID1234616995]).
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"In the second quarter, Alkermes continued to execute successfully across the business. VIVITROL and ARISTADA both grew year-over-year and sequentially, and LYBALVI continued on a strong launch trajectory," commented Iain Brown, Chief Financial Officer of Alkermes. "Today, we are pleased to be raising our financial expectations for full-year 2022, primarily due to LYBALVI’s launch performance and updated assumptions related to continued royalty revenues on sales of long-acting INVEGA products outside of the U.S. We believe that we are well positioned to continue to make meaningful progress against our strategic priorities and to drive shareholder value."
Quarter Ended June 30, 2022 Financial Results
Revenues
– Total revenues for the quarter were $276.2 million, compared to $303.7 million for the same period in the prior year.
– Net sales of proprietary products for the quarter were $190.8 million, compared to $160.8 million for the same period in the prior year.
Net sales of VIVITROL were $96.1 million, compared to $88.4 million for the same period in the prior year, representing an increase of approximately 9%.
Net sales of ARISTADAi were $74.6 million, compared to $72.4 million for the same period in the prior year, representing an increase of approximately 3%.
Net sales of LYBALVI were $20.1 million, following its commercial launch in October 2021.
– Manufacturing and royalty revenues for the quarter were $85.3 million, compared to $142.3 million for the same period in the prior year.
Royalty revenues from INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA and INVEGA HAFYERA/BYANNLI (the long-acting INVEGA products) were $26.6 million, compared to $81.1 million for the same period in the prior year. This decrease was driven primarily by Janssen Pharmaceutica N.V.’s (Janssen) partial termination of the license agreement related to sales of the long-acting INVEGA products in the United States (U.S.).
Manufacturing and royalty revenues from VUMERITY were $26.2 million, compared to $20.3 million for the same period in the prior year.
Costs and Expenses
– Total operating expenses for the quarter were $310.7 million, compared to $299.3 million for the same period in the prior year, primarily reflecting increased investment to support the commercial launch of LYBALVI.
Cost of Goods Manufactured and Sold were $58.4 million, compared to $53.1 million for the same period in the prior year.
Research and Development (R&D) expenses were $92.9 million, compared to $97.5 million for the same period in the prior year.
Selling, General and Administrative (SG&A) expenses were $150.4 million, compared to $139.2 million for the same period in the prior year.
Profitability
– Net loss according to generally accepted accounting principles in the U.S. (GAAP) was $30.1 million for the quarter, or a basic and diluted GAAP loss per share of $0.18. This compared to GAAP net income of $2.4 million, or a basic and diluted GAAP earnings per share of $0.01, for the same period in the prior year.
– Non-GAAP net income was $10.5 million for the quarter, or a non-GAAP basic and diluted earnings per share of $0.06. This compared to non-GAAP net income of $49.2 million for the quarter, or a non-GAAP basic earnings per share of $0.31 and a diluted earnings per share of $0.30, for the same period in the prior year.
Balance Sheet
– At June 30, 2022, the company recorded cash, cash equivalents and total investments of $760.0 million, compared to $758.7 million at March 31, 2022. The company’s total debt outstanding as of June 30, 2022 was $294.5 million.
"Our second quarter results reflect revenue growth from our proprietary commercial portfolio, highlighted by our continued progress in the launch of LYBALVI, a new oral treatment for schizophrenia and bipolar I disorder," said Richard Pops, Chief Executive Officer of Alkermes. "At the same time, we continued to make progress in our development pipeline, highlighted by the presentation of nemvaleukin ARTISTRY-1 data at the 2022 ASCO (Free ASCO Whitepaper) annual meeting. As we strive to make a meaningful impact on the lives of patients and families, we will continue to focus on execution against our strategic priorities and our commitment to deliver value for our shareholders."
Financial Expectations for 2022
The following updated financial expectations for 2022 primarily reflect LYBALVI’s launch performance to date and the company’s current assumption that it will continue to receive royalty payments related to sales of the long-acting INVEGA products outside the U.S. through at least October 2022. All line items are according to GAAP, except as otherwise noted.
Recent Events:
Oncology
In June 2022, the company presented data from its phase 1/2 ARTISTRY-1 clinical trial for nemvaleukin alfa (nemvaleukin), the company’s novel, investigational, engineered interleukin-2 (IL-2) variant immunotherapy, at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting. Trial-in-progress posters from the ongoing ARTISTRY-3 trial and the potential registration-enabling ARTISTRY-6 and ARTISTRY-7 trials were also presented at the ASCO (Free ASCO Whitepaper) meeting.
Psychiatry
In May 2022, the company presented research related to its psychiatry portfolio at four scientific conferences. The meetings included: American Telemedicine Association (ATA) Annual Conference, International Society for Pharmacoeconomics and Outcomes Research (ISPOR) Annual Meeting, American Psychiatric Association (APA) Annual Meeting, and American Society of Clinical Psychopharmacology (ASCP) Annual Conference.
Other
In May 2022, the company announced a series of actions as part of its ongoing commitment to strong corporate governance and regular board refreshment, including the appointment to the company’s Board of Directors (the Board) of Christopher I. Wright, M.D., Ph.D., a new, independent director with neuroscience and drug development expertise and the seventh independent director to join the Board in the last three years; the appointment of Nancy J. Wysenski as Lead Independent Director of the Board; and the retirement from the Board of two longer-serving directors, David W. Anstice AO and Wendy L. Dixon, Ph.D.
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 27, 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. BST) on Wednesday, July 27, 2022, through Wednesday, August 3, 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 13731319.