Alkermes Moves to Loss but Beats

Alkermes, Inc. (ALKS - Analyst Report) reported a second quarter fiscal 2010 net loss of 5 cents per share, compared with a profit of 2 cents in the year-ago period. The Zacks Consensus Estimate was a loss of 10 cents.

Revenues in the quarter increased 1.9 % to $48.2 million from $47.3 million in the year-ago quarter. The increase was driven by manufacturing and royalty revenues from Risperdal Consta.
 
Total manufacturing revenues for the quarter came in at $32.8 million as against $33 million in the year-ago quarter.  Manufacturing revenues for the quarter included $31.9 million related to Risperdal Consta, marketed worldwide by Johnson & Johnson (JNJ - Analyst Report) and manufactured by Alkermes, compared to $30.7 million for Consta and $2.3 million for Vivitrol for the year-ago quarter.
 
Royalty revenues for the quarter came in at $8.8 million, based on Risperdal Consta sales of $352.6 million, as against $8.4 million, on sales of $343.1 million of the schizophrenia drug for the comparable period in 2008.
 
Net collaborative profit for Vivitrol, for the treatment of alcohol dependence, came in at $0.7 million for the reported quarter, compared to $0.6 million for the comparable period in 2008. Furthermore, the company reported $4.6 million in the quarter in revenues from sale of Vivitrol.
 
Research and development (R&D) expenses for the second quarter of fiscal 2010 stood at $20.7 million. R&D spend was $19.7 million for the same period in 2008.
 
Selling, general and administrative (SG&A) expenses for the reported quarter increased 76% to $20.6 million from $11.7 million for the same period in 2008. The SG&A expenses for the quarter were inclusive of $1.4 million of severance coasts and $0.9 million of share-based compensation expenses.
 
The company exited the second quarter of fiscal 2010 with cash and total investments of $369.5 million, as against $380.4 million at June 30, 2009.
 
Alkermes revised its net loss and revenues expectations for fiscal 2010. The company expects to suffer a loss in the range of $45 million to $55 million from the prior range of $30 million to $40 million. Revenues are forecasted between $168 million to $183 million from the prior range of $182 million to $197 million. It anticipates lower manufacturing revenues for Risperdal Consta coupled with lower manufacturing revenues and sales of Vivitrol in the first half of its fiscal year.
 
Currently we are Neutral on Alkermes.

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