On February 25, 2016 Alkermes plc (NASDAQ: ALKS) reported financial results for the twelve months ended Dec. 31, 2015 and provided financial expectations for 2016 (Press release, Alkermes, FEB 25, 2016, View Source;p=RssLanding&cat=news&id=2143181 [SID:1234509192]).

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"Alkermes has a diversified CNS business poised for significant growth over the coming years. In 2015, we continued to successfully execute on our business plan, highlighted by the robust revenue growth of VIVITROL and the launch of our novel, long-acting antipsychotic ARISTADA for the treatment of schizophrenia," said Richard Pops, Chief Executive Officer of Alkermes. "Looking ahead to 2016, we expect to achieve continued revenue growth and to make significant advances across our pipeline. We will continue to enroll the pivotal clinical studies of ALKS 3831 for schizophrenia and ALKS 8700 for multiple sclerosis; obtain the first clinical data for ALKS 7119, our CNS candidate for Alzheimer’s agitation, and RDB 1450, our immuno-oncology candidate; and report results from the FORWARD-5 efficacy study of ALKS 5461 for major depressive disorder by year-end."

"Our financial results in 2015 were driven by the strong performance of VIVITROL, the approval and launch of ARISTADA into a rapidly growing long-acting antipsychotic market, and the continued strength of our base business," commented James Frates, Chief Financial Officer of Alkermes. "In 2016, we expect our business to continue to grow, led by VIVITROL and ARISTADA. Together with our solid royalty and manufacturing base business, these proprietary products are expected to drive revenue growth of 15 to 20 percent."

Quarter Ended Dec. 31, 2015 Financial Highlights

Total revenues for the quarter were $163.1 million. This compared to $175.2 million for the same period in the prior year, or $156.7 million excluding $18.5 million of revenues from the products associated with the Gainesville manufacturing facility that was divested in April 2015 ("the Gainesville Divestiture").

Net loss according to generally accepted accounting principles in the U.S. (GAAP) was $69.4 million, or a basic and diluted GAAP loss per share of $0.46, for the quarter and reflected increased investment in the company’s advancing late-stage pipeline and commercial infrastructure. This compared to GAAP net income of $30.5 million, or a basic GAAP earnings per share (EPS) of $0.21 and a diluted GAAP EPS of $0.20 for the same period in the prior year, or GAAP net income of $25.2 million, or a basic EPS of $0.17 and a diluted EPS of $0.16, excluding $5.3 million of GAAP net income related to the Gainesville Divestiture.

Non-GAAP net loss was $22.6 million, or a non-GAAP basic and diluted loss per share of $0.15 for the quarter. This compared to non-GAAP net income of $16.8 million, or a non-GAAP basic and diluted EPS of $0.11 for the same period in the prior year, or non-GAAP net income of $9.0 million, or a non-GAAP basic and diluted EPS of $0.06, excluding $7.8 million of non-GAAP net income related to the Gainesville Divestiture.

Quarter Ended Dec. 31, 2015 Financial Results

Revenues

Net sales of VIVITROL were $38.2 million, compared to $29.7 million for the same period in the prior year, representing an increase of 29%. On a unit basis, sales grew 43% compared to the same period in the prior year. Compared to the third quarter of 2015, VIVITROL grew 7% on a unit basis, driven by increased adoption by treatment systems, while net sales grew 1% as the company increased accruals for Medicaid rebates to reflect the increasing volume of VIVITROL units covered by Medicaid.

Net sales of ARISTADA were $4.6 million, following its launch in October 2015.

Manufacturing and royalty revenues from RISPERDAL CONSTA, INVEGA SUSTENNA/XEPLION and INVEGA TRINZA were $75.1 million, compared to $70.3 million for the same period in the prior year.

Manufacturing and royalty revenues from AMPYRA/FAMPYRA1 were $19.1 million, compared to $24.3 million for the same period in the prior year, due primarily to the timing of shipments.

Royalty revenue from BYDUREON was $12.2 million, compared to $9.8 million for the same period in the prior year.

Costs and Expenses

Operating expenses were $230.2 million for the quarter ended Dec. 31, 2015, reflecting increased investment in the company’s development pipeline and the launch of ARISTADA. This compared to $190.8 million for the same period in the prior year, or $177.4 million excluding $13.4 million of operating expenses related to the Gainesville Divestiture.

Calendar Year 2015 Financial Highlights

Total revenues were $628.3 million in calendar 2015, which included VIVITROL net sales of $144.4 million and ARISTADA net sales of $4.6 million. This compared to total revenues of $618.8 million for calendar 2014. Please see the tables at the end of this press release for a detailed breakdown of the revenues from our key commercial products. Excluding the Gainesville Divestiture, 2015 total revenues were $608.6 million in calendar 2015, compared to total revenues of $545.8 million in calendar 2014.

GAAP net loss was $227.2 million, or a basic and diluted GAAP loss per share of $1.52, for calendar 2015 and reflected increased investment in the company’s advancing late-stage pipeline and the launch of ARISTADA in October 2015. This compared to a GAAP net loss of $30.1 million, or a basic and diluted GAAP loss per share of $0.21, for calendar 2014. Excluding the Gainesville Divestiture, GAAP net loss was $231.7 million, or a basic and diluted loss per share of $1.55, in calendar 2015, compared to a GAAP net loss of $53.7 million, or a basic and diluted GAAP loss per share of $0.37, in calendar 2014.

Non-GAAP net loss was $53.2 million, or a non-GAAP basic and diluted loss per share of $0.36, for calendar 2015. This compared to non-GAAP net income of $54.6 million, or a non-GAAP basic EPS of $0.38 and a non-GAAP diluted EPS of $0.35, for calendar 2014. Excluding the Gainesville Divestiture, non-GAAP net loss was $59.5 million, or a non-GAAP basic and diluted loss per share of $0.40, in calendar 2015, compared to a non-GAAP net income of $19.4 million, or a basic and diluted EPS of $0.13, in calendar 2014.

At Dec. 31, 2015, Alkermes recorded cash and total investments of $798.8 million, compared to $801.6 million at Dec. 31, 2014. At Dec. 31, 2015, the company’s total debt outstanding was $349.9 million.

Financial Expectations for 2016

The following outlines the company’s financial expectations for 2016, which include continued investment in the pipeline and a full year of expenses related to the ARISTADA commercial launch. 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.

Revenues: The company expects total revenues to range from $700 million to $750 million, a 15% to 20% increase from 2015 excluding revenues derived from the Gainesville Divestiture, driven by continuing growth of VIVITROL and the ongoing launch of ARISTADA. Included in this total revenue expectation, Alkermes expects VIVITROL net sales to range from $180 million to $200 million. For ARISTADA, the company expects to provide net product revenue guidance during 2016 after gaining additional experience from the launch.

Cost of Goods Manufactured and Sold: The company expects cost of goods manufactured and sold to range from $125 million to $135 million.

Research and Development (R&D) Expenses: The company expects R&D expenses to range from $370 million to $400 million.
Selling, General and Administrative (SG&A) Expenses: The company expects SG&A expenses to range from $360 million to $390 million.

Amortization of Intangible Assets: The company expects amortization of intangibles to be approximately $60 million.

Net Interest Expense: The company expects net interest expense to be approximately $10 million.

Income Tax Expense: The company expects income tax expense of up to $10 million.

GAAP Net Loss: The company expects a GAAP net loss to be in the range of $225 million to $255 million, or a basic and diluted loss per share of $1.48 to $1.68, based on a weighted average basic and diluted share count of approximately 152 million shares outstanding.

Non-GAAP Net Loss: The company expects a non-GAAP net loss to be in the range of $25 million to $55 million, and non-GAAP basic and diluted loss per share to be between $0.16 and $0.36.

Capital Expenditures: The company expects capital expenditures to be approximately $45 million.