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Alkermes suffered a loss of 13 cents per share in the year-ago quarter. The company swung to a profit in the reported quarter on the back of higher revenues and lower operating expenses.
Total revenue for the third quarter of fiscal 2013 jumped 8.2% year-over-year to $135.9 million year-over-year. The increase in total revenues during the reported quarter was primarily due to growth in the company’s key products. Revenues surpassed the Zacks Consensus Estimate of $126 million.
In the reported quarter, Alkermes recorded $52.5 million (up 10.3% year-over-year) of manufacturing and royalty revenues from its long-acting atypical antipsychotic franchise comprising Risperdal Consta and Invega Sustenna/Xeplion. These drugs are marketed by Johnson & Johnson ( JNJ - Analyst Report ) . Worldwide end-market sales of these drugs at the end of the third quarter of fiscal 2013 were approximately $586 million, reflecting an increase of 13% compared to the year-ago period.
Alkermes recorded manufacturing and royalty revenues of $18.4 million (up 73.6% year-over-year) in the reported quarter from Ampyra/Fampyra. In the US, unaudited end-market sales of Ampyra for the third quarter of fiscal 2013 were approximately $73 million (up 28%), whereas outside the US, end-market sales of Fampyra (ex-US trade name of Ampyra) for the quarter were approximately $10.5 million (up 1%).
Alkermes earned royalty of $5.3 million on revenues of type II diabetes treatment Bydureon, which is marketed by Bristol-Myers Squibb ( BMY - Analyst Report ) . Royalty revenues for Bydureon were based on end-market net sales of approximately $65 million.
Vivitrol, a legacy Alkermes product, performed well in the third quarter of fiscal 2013. Sales of the product climbed approximately 50% year over year to $15.9 million.
During the quarter, Alkermes also earned revenues from Tricor 145 ($6.8 million) and Ritalan LA/Focalin XR franchise ($9.8 million). Research and development (R&D) revenue from collaborations came in at $1.7 million in the third quarter of fiscal 2013 as opposed to $2.3 million a year ago.
Reported total expenses were $110.6 million in the third quarter of fiscal 2013, down from the year-ago quarter of $130.6 million. The reduction in total expenses was primarily due to the timing of clinical trial expenses and certain merger-related expenses which were incurred in the year-ago quarter.
Fiscal 2013 Projection Upped
Alkermes increased its outlook for fiscal 2013. Alkermes now expects adjusted earnings per share in the range of 99 cents to $1.13 (previous: 88 cents to $1.02). The Zacks Consensus Estimate is currently 64 cents.
The company also upped its revenue guidance for fiscal 2013 to the range of $520 million to $545 million (previous guidance: $510-$540 million). The higher guidance is due to increased net sales expectation of Vivitrol, which is now expected to generate around $55–$60 million of net product sales (previous: $45 million to $55 million) in fiscal 2013.
We believe Alkermes’ new revenue guidance is achievable. The Zacks Consensus Estimate of $525 million is towards the lower end of the company’s new revenue guidance range.
Alkermes lowered its R&D guidance for fiscal 2013 in the range of $140 million to $150 million from the previous range of $150 million to $160 million. The company however maintained its selling, general and administrative expenses guidance at $120 million to $130 million.
Alkermes currently carries a Zacks Rank #2 (Buy). Elan also carries a comparable rank. Meanwhile, Targacept Inc. ( TRGT - Snapshot Report ) looks more attractive in the pharma sector carrying a Zacks Rank #1 (Strong Buy).
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