On April 27, 2022 Alkermes plc (Nasdaq: ALKS) reported financial results for the first quarter of 2022 (Press release, Alkermes, APR 27, 2022, View Source [SID1234613044]).
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"Our strong first quarter results reflect continued momentum across the business, and a sharp operational focus that provides a solid foundation to drive further growth of our proprietary products and advance our pipeline of development programs in 2022. As we execute on our launch strategy for LYBALVI, we are particularly encouraged by early utilization trends and feedback from healthcare providers that underscore LYBALVI’s value proposition in the oral antipsychotic market," said Richard Pops, Chief Executive Officer of Alkermes. "With our focus on disciplined allocation of capital, strong corporate governance, and our commitment to long-term profitability targets, we are delivering on our commitment to efficiently drive growth and actively managing the business to create value for our shareholders in 2022 and beyond."
Quarter Ended March 31, 2022 Financial Results
Revenues
– Total revenues for the quarter were $278.5 million, compared to $251.4 million for the same period in the prior year.
– Net sales of proprietary products for the quarter were $171.3 million, compared to $130.0 million for the same period in the prior year.
Net sales of VIVITROL were $84.9 million, compared to $74.5 million for the same period in the prior year, representing an increase of approximately 14%.
Net sales of ARISTADAi were $72.5 million, compared to $55.4 million for the same period in the prior year, representing an increase of approximately 31%.
Net sales of LYBALVI were $13.9 million, following its commercial launch in October 2021.
– Manufacturing and royalty revenues for the quarter were $105.2 million, compared to $119.8 million for the same period in the prior year.
Royalty revenues from INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA and INVEGA HAFYERA (the long-acting INVEGA products) were $37.1 million, compared to $61.6 million for the same period in the prior year. This includes approximately one month of royalty payments related to sales of the long-acting INVEGA products in the United States (U.S.), compared to three months in 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 long-acting INVEGA products in the U.S., which took effect starting in February of 2022.
° In April 2022, the company commenced binding arbitration proceedings related to, among other things, Janssen’s partial termination of the license agreement in the U.S. and Janssen’s royalty and other obligations under the agreement.
Manufacturing and royalty revenues from RISPERDAL CONSTA were $17.4 million, compared to $14.2 million for the same period in the prior year.
Manufacturing and royalty revenues from VUMERITY were $30.6 million, compared to $13.4 million for the same period in the prior year.
Costs and Expenses
– Total operating expenses for the quarter were $305.1 million, compared to $267.9 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 $55.2 million, compared to $41.0 million for the same period in the prior year.
Research and Development (R&D) expenses were $96.0 million, compared to $92.3 million for the same period in the prior year.
Selling, General and Administrative (SG&A) expenses were $145.1 million, compared to $125.2 million for the same period in the prior year.
– Other Expense, Net for the quarter included a reduction of $19.1 million in the fair value of contingent consideration related to increased risk of non-payment of certain milestone payments by Baudax Bio, Inc. in light of its disclosures regarding its ability to continue as a going concern.
Profitability
– Net loss according to generally accepted accounting principles in the U.S. (GAAP) was $35.9 million for the quarter, or a basic and diluted GAAP loss per share of $0.22. This compared to GAAP net loss of $22.4 million, or a basic and diluted GAAP loss per share of $0.14, for the same period in the prior year.
– Non-GAAP net income was $19.6 million for the quarter, or a non-GAAP basic and diluted earnings per share of $0.12. This compared to non-GAAP net income of $17.8 million for the quarter, or a non-GAAP basic and diluted earnings per share of $0.11, for the same period in the prior year.
Balance Sheet
– At March 31, 2022, the company recorded cash, cash equivalents and total investments of $758.7 million, compared to $765.7 million at Dec. 31, 2021. The company’s total debt outstanding as of March 31, 2022 was $295.2 million.
"Our first quarter results demonstrate the strength of our proprietary commercial product portfolio and our continued focus on efficient management of our cost structure. We are in a strong financial position to execute on our strategic priorities and work toward achievement of our long-term profitability targets," commented Iain Brown, Chief Financial Officer of Alkermes. "Today, we are reiterating our financial expectations for 2022, as we focus on efficiently driving growth of LYBALVI, ARISTADA and VIVITROL, and advancing our development pipeline."
Financial Expectations for 2022
Alkermes reiterates its financial expectations for 2022, and the assumptions underlying such expectations, as set forth in its press release dated Feb. 16, 2022.
Recent Events:
Oncology
In February 2022, the company presented new data from the ongoing 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) Genitourinary (GU) Cancers Symposium. The presentation included updated data from the monotherapy arm of ARTISTRY-1 in patients with advanced renal cell carcinoma (RCC), including patients who were checkpoint inhibitor-pretreated.
In March 2022, the company presented nemvaleukin data from ARTISTRY-1 in patients with platinum-resistant ovarian cancer (PROC) in an oral plenary session at the Society of Gynecologic Oncology (SGO) 2022 Annual Meeting on Women’s Cancer. The company also presented a trial-in-progress poster from the ongoing phase 3 ARTISTRY-7 global study evaluating the efficacy, safety and tolerability of IV nemvaleukin in combination with pembrolizumab compared to investigator’s choice chemotherapy in patients with platinum-resistant epithelial ovarian, fallopian tube or primary peritoneal cancer.
Psychiatry
In April 2022, the company presented new research from its psychiatry portfolio at the 2022 Congress of the Schizophrenia International Research Society (SIRS). The presentations included detailed results from the recently completed ENLIGHTEN-Early study of LYBALVI (olanzapine and samidorphan), a phase 3b study that evaluated the effect of LYBALVI compared to olanzapine on body weight in young adult patients (ages 16 to 39; mean age: 26 years) with schizophrenia, schizophreniform disorder or bipolar I disorder who were early in their illness.
Other
In April 2022, the company commenced binding arbitration proceedings related to, among other things, Janssen’s partial termination of two license agreements with the company in the U.S. and Janssen’s royalty and other obligations under the agreements. Under these agreements, Janssen received access and rights to Alkermes’ small particle pharmaceutical compound technology, known as NanoCrystal Technology, which enabled the development and commercialization of a number of successful products, such as INVEGA SUSTENNA, INVEGA TRINZA, INVEGA HAFYERA and CABENUVA. Janssen partially terminated these agreements in the United States effective as of February 2022.
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, April 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, April 27, 2022, through Wednesday, May 4, 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 13727838.