Alkermes Plc (ALKS 2.23%), a neuroscience-focused biopharmaceutical company, released its second quarter 2025 results on July 29, 2025. The standout news was a significant outperformance versus Wall Street expectations, with diluted earnings per share (GAAP) coming in at $0.52, well above the GAAP consensus estimate of $0.36. Revenue (GAAP) also surprised to the upside at $390.7 million, exceeding the $341.4 million GAAP analyst estimate, though down 2.1% compared to Q2 2024. Proprietary drugs for central nervous system disorders drove 14% year-over-year growth, helping offset marked declines in legacy manufacturing and royalty streams. Overall, the quarter showed strong financial discipline, continued pipeline investment, and heavy reliance on the performance of Alkermes' key marketed neuroscience products.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $0.52 | $0.36 | $0.53 | (–1.9 %) |
| Revenue (GAAP) | $390.7 million | $341.4 million | $399.1 million | (2.1%) |
| Adjusted EBITDA | $126.5 million | $135.3 million | -6.5 % | |
| R&D Expense | $77.4 million | $59.6 million | 29.9 % | |
| SG&A Expense | $170.8 million | $168.1 million | 1.6 % |
Source: Analyst estimates for the quarter provided by FactSet.
About Alkermes Plc: Core Business and Current Focus
Alkermes is a pharmaceuticals company specializing in proprietary medicines that address central nervous system (CNS) disorders such as schizophrenia, bipolar disorder, alcohol dependence, and opioid dependence. Its U.S.-marketed portfolio includes ARISTADA, a long-acting injectable antipsychotic for schizophrenia; LYBALVI, an oral medication approved for schizophrenia and bipolar I disorder; and VIVITROL, an extended-release injectable for alcohol and opioid dependence.
The company’s strategy is anchored in the commercial success of these proprietary brands, backed by a strong intellectual property portfolio. Alkermes generates additional revenue from manufacturing and royalty agreements with other major pharmaceutical companies, though this portion of the business is decreasing as legacy agreements expire. Ongoing research and development is central to Alkermes' future, especially the advancement of new CNS drug candidates such as orexin 2 receptor agonists for narcolepsy and sleep disorders. Key business success factors include continued sales growth in core products, patent protection, efficient R&D investment, and risk management around Medicaid and generic drug challenges.
Quarter Highlights: Financial and Product Performance
The second quarter of 2025 featured strong results from Alkermes’ three CNS drugs. Combined proprietary product sales grew to $307.2 million, up 14% compared to Q2 2024. ARISTADA, a long-acting injectable antipsychotic for schizophrenia, saw revenue rise 18%, including approximately $11.0 million in gross-to-net Medicaid adjustments. VIVITROL, the injectable for alcohol and opioid dependence, grew 9% and benefited from $9.0 million in favorable Medicaid gross-to-net adjustments; notably, alcohol dependence accounted for about 75% of VIVITROL volume in Q1 2025. LYBALVI, an oral medication for schizophrenia and bipolar disorder, posted 18% revenue growth compared to Q2 2024 along with a 22% increase in total prescriptions.
Despite the double-digit proprietary sales growth, overall GAAP revenue dropped by 2.1% year over year. This small decline came from a sharp 35.8% fall in manufacturing and royalty revenues. For example, revenue from VUMERITY, a treatment for multiple sclerosis under a royalty agreement, was $39.4 million. Royalties from XEPLION®, INVEGA TRINZA®/TREVICTA®, and INVEGA HAFYERA®/BYANNLI® reached $30.3 million, increasing Alkermes' dependence on its own branded medicines for revenue growth.
With adjusted EBITDA was $126.5 million versus $135.3 million in Q2 2024 as the company ramped up research and development spending. Net income from continuing operations (GAAP) stood at $87.1 million, down from $94.7 million for Q2 2024, reflecting higher R&D costs. Research and development expense (GAAP) rose nearly 30% to $77.4 million compared to Q2 2024. Selling, general, and administrative expense increased by 1.6% to $170.8 million compared to Q2 2024 even as Alkermes continued expanding its U.S. psychiatry sales force.
Cash and investments at quarter-end reached $1.05 billion, up notably from $916.2 million at the prior quarter (Q1 2025). Shareholder equity increased to $1.62 billion as of June 30, 2025. A key event this period was the report of positive results from the Vibrance-1 Phase 2 study of ALKS 2680 (alixorexton), an orexin 2 receptor agonist for narcolepsy type 1. This signals a major investment in next-generation neuroscience innovation, with global Phase 3 studies planned and new data in narcolepsy type 2 expected in the fall. Other pipeline candidates, such as ALKS 4510 and ALKS 7290, are also set to enter clinical development in 2025.
Looking Ahead: Financial Guidance and Key Watchpoints
Alkermes management reiterated its full fiscal 2025 financial guidance. The outlook is built on expectations of volume-driven sales increases for VIVITROL, ARISTADA, and LYBALVI, rather than price changes. This is significant since 45-50% of sales for each core brand come from public payers.
No changes were announced to the company’s capital allocation, pipeline investment, or commercial footprint strategy. Investors are likely to keep a close eye on the trajectory of R&D spending, the pace of new product launches, and any signals about generic or competitive threats to the CNS portfolio. Progress in the orexin drug program, shifts in Medicaid or pricing dynamics, and further reductions in contract manufacturing and royalties remain the key watchpoints as Alkermes pushes deeper into proprietary neuroscience and sleep-disorder markets.
ALKS does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
