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Alkermes PLC: Sales Rise, Losses Fall, and the Pipeline Moves Forward

By Brian Feroldi – Nov 7, 2016 at 2:42PM

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The biopharma continues to make good progress with its pipeline as it slowly inches towards profitability.

Alkermes (ALKS 2.87%), a biopharmaceutical company that specializes in extended-release drug delivery technology, reported third-quarter results on Nov. 2 and provided investors with an update on its pipeline. Let's dig in to see what happened with the company during the period.

Image source: Getty Images.

Alkermes results: The raw numbers

MetricQ3 2016Q3 2015Change
Revenue $180.2 million $152.7 million 18%
Non-GAAP net loss ($14.1 million) ($28.8 million) N/A
Non-GAAP EPS ($0.09) ($0.19) N/A

Data source: Alkermes quarterly report. GAAP = generally accepted accounting principles. EPS = earnings per share.

What happened with Alkermes this quarter?

  • Sales of Vivitrol, the company's extended-release drug for treating opioid and alcohol dependence, grew by 47% to $55.8 million.
  • Aristada, which is an extended-release version of Bristol-Myers Squibb's former blockbuster schizophrenia drug Abilify, grew by 36% to $14.0 million.
  • Manufacturing and royalty revenue from Risperdal Consta, Invega Sustenna (Xeplion), and Invega Trinza (Trevicta) totaled $73.3 million in the quarter. That was up roughly 8% over the same period in the prior year.
  • Total manufacturing and royalty revenues from Ampyra (Fampyra) were $12.9 million, down sharply from the $22.1 million recorded in the year-ago period. However, management said the decline was caused by the timing of manufacturing shipments, and that the drug's overall trend line remains positive.
  • Royalties from sales of diabetes treatment Bydureon dipped to $11.6 million, down 11% year over year.
  • Operating expenses only grew by 5% to $241.4 million, mostly due to increased pipeline costs and the continued rollout of Aristada and Vivitrol.
  • Alkermes ended the quarter with $624.6 million in cash.

What management had to say

Richard Pops, CEO of Alkermes, was happy with the quarterly results and expressed his bullishness on the company's prospects, saying "We are at an unprecedented place in Alkermes' evolution, with two proprietary products growing in their markets, ALKS 5461 advancing at full speed, and two additional late-stage candidates well into their pivotal programs."

CFO James Frates also reaffirmed that the company's performance puts it on pace to deliver on its full-year guidance.

Looking forward

Alkermes continues to project that its revenue for the year will land between $710 million and $760 million, which should allow it to show a modest non-GAAP loss of $5 million to $35 million, or roughly $0.03 to $0.23 per share. Beyond the numbers, shareholders have a number of data readouts and regulatory decisions to look forward to over the next year or so.

The first is a go/no-go decision from the FDA on its two-month dosing option of Aristada. This product was submitted for FDA approval in August, which puts its review date in June of next year.

Next is ALKS 5461, the company's potential treatment for depression; management already has the late-stage data in hand, and Alkermes plans to meet with the FDA in the first quarter of 2017 to request fast-track designation. The company stated it is also close to submitting ALKS 3831, which is in development as a potential treatment for schizophrenia, for regulatory review.

Other late-stage product candidates for investors to keep an eye on include ALKS 8700, a prodrug designed to compete with Biogen's megablockbuster multiple sclerosis drug Tecfidera. The company expects to have pharmacokinetic bridging data completed by year-end. Data from ALKS 6428, a drug designed to help patients with opioid addiction in transitioning to Vivitrol, is also expected in the first half of 2017.

All in all, the company's results showed that sales are growing, losses are falling, and its pipeline continues to make progress.

Brian Feroldi has no position in any stocks mentioned. Like this article? Follow him on Twitter where he goes by the handle @Longtermmindset or connect with him on LinkedIn to see more articles like this.

The Motley Fool owns shares of and recommends Biogen. The Motley Fool recommends Alkermes.

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