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Why Is Alkermes (ALKS) Down 8.3% Since the Last Earnings Report?

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It has been more than a month since the last earnings report for Alkermes PLC (ALKS - Free Report) . Shares have lost about 8.3% in that time frame, underperforming the market.

Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Alkermes Beats Q3 Earnings Estimates, Cuts Sales View

Alkermes reported earnings of 3 cents per share in the third quarter of 2017, beating the Zacks Consensus Estimate of a penny. The bottom line also bettered the loss of 9 cents incurred in the year-ago quarter.

The company’s revenues of $217.4 million in the quarter were up 20.6% year over year. However, the top line missed the Zacks Consensus Estimate of $235 million.

Revenues

Manufacturing and royalty revenues from Risperdal Consta, Invega Sustenna/ Xeplion and Invega Trinza/Trevicta were $79.4 million, up 8.3% year over year. The same from Ampyra/Fampyra were up 89.9% year over year to $24.5 million.

Vivitrol sales improved 24% year over year to $69.2 million.

Aristada sales came in at $24.5 million compared with $14 million in the third quarter of 2016.

2017 Outlook

The company trimmed its revenue guidance for 2017. Alkermes now expects total revenue to be in the range of $850 million to $880 million, down from the previous range of $870 million to $920 million. The guidance includes Vivitrol net sales to range from $265 million to $275 million lower than $280 million to $300 million, projected earlier.

For 2017, the company reiterated its expectations for bottom-line and they are expected to range from a loss of 10 cents to earnings of 9 cents.

Pipeline Update

Alkermes anticipates that the FDA will review the new drug application (NDA) for ALKS 5461 which is being evaluated for the treatment of major depressive disorder in 2018. Going forward,  the company intends to submit a New Drug Application (NDA) for ALKS 8700 for the treatment of relapsing-remitting MS RRMS to the FDA in 2018.

Alkermes also expects data read out from the pivotal six month phase III study evaluating weight in patients with stable schizophrenia receiving olanzapine or ALKS 3831 in 2018.

How Have Estimates Been Moving Since Then?

Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.

Alkermes PLC Price and Consensus

Alkermes PLC Price and Consensus | Alkermes PLC Quote

VGM Scores

At this time, Alkermes' stock has a strong Growth Score of A, though it is lagging a lot on the Momentum front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is more suitable for growth investors than momentum investors.

Outlook

While estimates have been broadly trending downward for the stock, the magnitude of this revision has been net zero. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.


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