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Why Is Alkermes (ALKS) Down 9% Since Last Earnings Report?
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It has been about a month since the last earnings report for Alkermes (ALKS - Free Report) . Shares have lost about 9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Alkermes due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Q2 Earnings & Revenues Beat Estimates
Alkermesreported second-quarter 2023 adjusted earnings of 55 cent per share, which beat the Zacks Consensus Estimate of 48 cents. The company reported adjusted earnings of 6 cents per share in the year-ago quarter.
Alkermes’ revenues of $617.4 million rose 123.5% from the year-ago quarter’s level. The substantial increase in revenues can be attributed to the back royalties and associated interests earned from the arbitration with Janssen Pharmaceuticals. The top line beat the Zacks Consensus Estimate of $479 million.
Quarter in Detail
Alkermes derives revenues on net sales of its proprietary products — Vivitrol, Aristada and Lybalvi — and manufacturing and/or royalty revenues on net sales of products commercialized by its partners.
Total manufacturing and royalty revenues increased 352% year over year to $385.9 million. Alkermes earned back royalties and interests of around $195.4 million for 2022 net U.S. sales, and around $50.2 million for first-quarter 2023 sales as a final award in its arbitration proceedings with Janssen.
Manufacturing and royalty revenues from Vumerity were up almost 23% year over year to $32.3 million. Royalty revenues for the same missed the Zacks Consensus Estimate and our model estimate of $34.47 million and $34.5 million, respectively.
Sales of the proprietary drug, Vivitrol, increased around 6% year over year to $102.1 million, driven primarily by growth in the alcohol dependence indication. The figure marginally beat the Zacks Consensus Estimate of $102 million and our model estimate of $101 million.
Sales for Aristada increased almost 10% year over year to $82.4 million, driven primarily by higher underlying demand. The figure missed the Zacks Consensus Estimate and our model estimate of $84 million and $83.7 million, respectively.
Lybalvi generated sales of $47 million. Sales of the drug increased 134% year over year, primarily driven by growth in demand. The Lybalvi sales figure beat both the Zacks Consensus Estimate and our model estimate of $46.14 million and $46 million, respectively.
Research and development expenses totaled $100.8 million, up 8.5% year over year. The surge was primarily due to increased expenses in advancement of clinical studies for nemvaleukin alfa and ALKS 2680.
Selling, general and administrative expenses totaled $205.3 million, up 36.5% year over year. This was due to increased investment to support the launch of Lybalvi and certain expenses related to the planned separation of the oncology business.
2023 Guidance
The company reiterated its guidance for 2023, issued on Jun 6, 2023.
It expects total revenues in the band of $1,550-$1,680 million compared with the previous guided range of $1,130-$1,250 million.
Net sales for Vivitrol are expected in the range of $380-$410 million. The same for Aristada are anticipated in the band of $315–$345 million. Lybalvi’s net sales are expected between $180 million and $205 million.
INVEGA royalties are expected in the band of $265-$280 million compared with the previous projection of $40-$45 million. Royalties and interests are expected to be around $195 million.
Research and Development expenses are anticipated in the range of $370-$400 million. Selling, general and administrative expenses are expected in the band of $695-$725 million.
The guidance includes Alkermes' combined neuroscience and oncology business for the entire year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 79.71% due to these changes.
VGM Scores
At this time, Alkermes has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Alkermes has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Alkermes (ALKS) Down 9% Since Last Earnings Report?
It has been about a month since the last earnings report for Alkermes (ALKS - Free Report) . Shares have lost about 9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Alkermes due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Q2 Earnings & Revenues Beat Estimates
Alkermesreported second-quarter 2023 adjusted earnings of 55 cent per share, which beat the Zacks Consensus Estimate of 48 cents. The company reported adjusted earnings of 6 cents per share in the year-ago quarter.
Alkermes’ revenues of $617.4 million rose 123.5% from the year-ago quarter’s level. The substantial increase in revenues can be attributed to the back royalties and associated interests earned from the arbitration with Janssen Pharmaceuticals. The top line beat the Zacks Consensus Estimate of $479 million.
Quarter in Detail
Alkermes derives revenues on net sales of its proprietary products — Vivitrol, Aristada and Lybalvi — and manufacturing and/or royalty revenues on net sales of products commercialized by its partners.
Total manufacturing and royalty revenues increased 352% year over year to $385.9 million. Alkermes earned back royalties and interests of around $195.4 million for 2022 net U.S. sales, and around $50.2 million for first-quarter 2023 sales as a final award in its arbitration proceedings with Janssen.
Manufacturing and royalty revenues from Vumerity were up almost 23% year over year to $32.3 million. Royalty revenues for the same missed the Zacks Consensus Estimate and our model estimate of $34.47 million and $34.5 million, respectively.
Sales of the proprietary drug, Vivitrol, increased around 6% year over year to $102.1 million, driven primarily by growth in the alcohol dependence indication. The figure marginally beat the Zacks Consensus Estimate of $102 million and our model estimate of $101 million.
Sales for Aristada increased almost 10% year over year to $82.4 million, driven primarily by higher underlying demand. The figure missed the Zacks Consensus Estimate and our model estimate of $84 million and $83.7 million, respectively.
Lybalvi generated sales of $47 million. Sales of the drug increased 134% year over year, primarily driven by growth in demand. The Lybalvi sales figure beat both the Zacks Consensus Estimate and our model estimate of $46.14 million and $46 million, respectively.
Research and development expenses totaled $100.8 million, up 8.5% year over year. The surge was primarily due to increased expenses in advancement of clinical studies for nemvaleukin alfa and ALKS 2680.
Selling, general and administrative expenses totaled $205.3 million, up 36.5% year over year. This was due to increased investment to support the launch of Lybalvi and certain expenses related to the planned separation of the oncology business.
2023 Guidance
The company reiterated its guidance for 2023, issued on Jun 6, 2023.
It expects total revenues in the band of $1,550-$1,680 million compared with the previous guided range of $1,130-$1,250 million.
Net sales for Vivitrol are expected in the range of $380-$410 million. The same for Aristada are anticipated in the band of $315–$345 million. Lybalvi’s net sales are expected between $180 million and $205 million.
INVEGA royalties are expected in the band of $265-$280 million compared with the previous projection of $40-$45 million. Royalties and interests are expected to be around $195 million.
Research and Development expenses are anticipated in the range of $370-$400 million. Selling, general and administrative expenses are expected in the band of $695-$725 million.
The guidance includes Alkermes' combined neuroscience and oncology business for the entire year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 79.71% due to these changes.
VGM Scores
At this time, Alkermes has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Alkermes has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.