Alkermes (ALKS 0.38%), a biopharmaceutical company focused on diseases of the central nervous system, released its second-quarter earnings results on Thursday, July 27. The report showed that revenue once again grew at double-digit rates thanks to increased demand for Vivitrol and Aristada. In addition, the company continues to make steady progress at moving its late-stage product candidates one step closer to the finish line.
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Alkermes Q2 results: The raw numbers
| Metric | Q2 2017 | Q2 2016 | Year-Over-Year Change |
|---|---|---|---|
| Revenue | $218.8 million | $195.2 million | 12.1% |
| GAAP net income | ($43 million) | ($47.2 million) | NM |
| Non-GAAP net income | $1.2 million | ($1.6 million) | NM |
| Non-GAAP EPS | $0.01 | ($0.01) | NM |
Data source: Alkermes. GAAP = generally accepted accounting principles. EPS = earnings per share. NM = not meaningful due to negative figures.
What happened with Alkermes this quarter?
- Revenue from Vivitrol, which is a drug used to treat opioid and alcohol dependence, grew 40%, to $66.1 million.
- Sales of Aristada, the company's extended-release schizophrenia treatment, jumped 120%, to $22.7 million.
- Alkermes won Food and Drug Administration (FDA) approval in June for its new two-month dosing option for Aristada.
- Revenues related to Johnson & Johnson's schizophrenia drugs Risperdal Consta, Invega Sustenna/Xeplicon, and Invega Trinza/Trevicta, grew 18%, to $82.2 million.
- Manufacturing and royalty revenues from Acorda Therapeutics' fell 37%, to $25.3 million.
- Royalty revenue from sales of Bydureon dipped 6%, to $11.6 million.
- Operating expenses jumped 9%, to $263.4 million, as the company continues to invest in its commercial infrastructure and manufacturing capabilities.
- Alkermes' balance sheet remains in good shape. The company ended June with $561 million in cash and $283 million in debt.
What management had to say
Alkermes CFO James Frates credited the company's strong second-quarter results to increased demand for Vivitrol and Aristada. He also commentated that, "The financial underpinnings of our business are strong for today and into the future, as we focus on growing our commercial portfolio and the clinical development of our pipeline candidates."
CEO Richard Pops also had some exciting news to share with investors related to ALKS 5461, which is the company's late-stage pipeline candidate for treating depression:
Following a pre-NDA meeting with FDA for ALKS 5461 earlier this week, we are on track to begin the rolling submission of the ALKS 5461 New Drug Application next month and expect to complete the submission by year-end 2017. We are excited to bring this important, potential, new proprietary medicine to patients struggling with major depressive disorder
CEO Pops also reminded investors that the company recently released exciting top-line data from its phase 3 ENLIGHTEN-1 study. This trial was the first of two phase 3 studies designed to evaluate ALKS 3831 as a treatment for schizophrenia. Data from the double-blind study showed that ALKS 3831 met both its primary and secondary endpoints, which is great news. The company's other phase 3 study of ALKS 3831 -- called ENLIGHTEN-2 -- remains ongoing, and data is expected in 2018.
Looking forward
CFO Frates once again reiterated that the company remains on track to deliver on its financial targets for 2017. As a quick reminder, management's guidance calls for revenue growth of about 20% and breakeven EPS when judged on a non-GAAP basis.
Overall, Alkermes' results demonstrate that the company is having success at executing against its growth strategy. With sales of its proprietary products on the rise and a few potential blockbusters waiting in the wings, Alkermes' future continues to look bright.
