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Alkermes plc (ALKS - Free Report) reported 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.
ALKS’ 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, a subsidiary of J&J (JNJ - Free Report) .
The top line beat the Zacks Consensus Estimate of $479 million.
The company’s shares have risen 15% year to date against the industry’s 11.3% decline.
Image Source: Zacks Investment Research
Quarter in Detail
ALKS derives revenues on net sales of its proprietary products — Vivitrol (alcohol and opioid dependence), Aristada (schizophrenia) and Lybalvi (schizophrenia and bipolar I disorder) — 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. In July, Alkermes received a final award in its arbitration proceedings with Janssen. Alkermes earned back royalties and interest of around $195.4 million for 2022 net U.S. sales and $50.2 million for first-quarter 2023 sales.
The final award confirms previous findings by the tribunal that Janssen can terminate license agreements but must pay royalties to Alkermes for products developed during the agreements.
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 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 slightly 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 estimates 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 the 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.
As of Jun 30, 2023, Alkermes had cash and cash equivalents of $907.2 million compared with $692.5 million as of Mar 31, 2023. Total outstanding debt was $292 million as of Jun 30, 2023.
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.
Recent Updates
Alkermes is making progress in separating its oncology business into a new, publicly-traded company called Mural Oncology plc. The separation will allow the company to focus on developing therapies for neurological conditions and improving profitability.
ALKS expects to complete the separation in the second half of 2023, subject to various customary conditions.
Per the company, the separation of the oncology business will allow it to have individual management team for each business. This will also help simplify capital allocation and ensure a long-term shareholder base.
In the past 90 days, the Zacks Consensus Estimate for ADC Therapeutics has widened from a loss of $2.60 per share to a loss of $2.61 for 2023. The consensus estimate has narrowed from a loss of $2.75 per share to a loss of $2.45 for 2024 during the same time frame. Shares of the company have lost 67.2% year to date.
ADCT’s earnings beat estimates in three of the trailing four quarters and missed the mark in one, delivering an average surprise of 10.70%.
In the past 90 days, the Zacks Consensus Estimate for Acadia Pharmaceuticals has narrowed from a loss of 58 cents per share to a loss of 31 cents for 2023. Shares of the company have rallied 83.2% year to date.
ACAD’s earnings beat estimates in two of the trailing four quarters and missed the mark in the other two, delivering an average negative surprise of 2.75%.
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Alkermes (ALKS) Q2 Earnings & Revenues Beat Estimates
Alkermes plc (ALKS - Free Report) reported 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.
ALKS’ 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, a subsidiary of J&J (JNJ - Free Report) .
The top line beat the Zacks Consensus Estimate of $479 million.
The company’s shares have risen 15% year to date against the industry’s 11.3% decline.
Image Source: Zacks Investment Research
Quarter in Detail
ALKS derives revenues on net sales of its proprietary products — Vivitrol (alcohol and opioid dependence), Aristada (schizophrenia) and Lybalvi (schizophrenia and bipolar I disorder) — 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. In July, Alkermes received a final award in its arbitration proceedings with Janssen. Alkermes earned back royalties and interest of around $195.4 million for 2022 net U.S. sales and $50.2 million for first-quarter 2023 sales.
The final award confirms previous findings by the tribunal that Janssen can terminate license agreements but must pay royalties to Alkermes for products developed during the agreements.
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 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 slightly 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 estimates 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 the 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.
As of Jun 30, 2023, Alkermes had cash and cash equivalents of $907.2 million compared with $692.5 million as of Mar 31, 2023. Total outstanding debt was $292 million as of Jun 30, 2023.
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.
Recent Updates
Alkermes is making progress in separating its oncology business into a new, publicly-traded company called Mural Oncology plc. The separation will allow the company to focus on developing therapies for neurological conditions and improving profitability.
ALKS expects to complete the separation in the second half of 2023, subject to various customary conditions.
Per the company, the separation of the oncology business will allow it to have individual management team for each business. This will also help simplify capital allocation and ensure a long-term shareholder base.
Alkermes plc Price and Consensus
Alkermes plc price-consensus-chart | Alkermes plc Quote
Zacks Rank & Other Stocks to Consider
Currently, Alkermes sports a Zacks Rank #1 (Strong Buy).
A couple of other top-ranked stocks in the same industry are ADC Therapeutics (ADCT - Free Report) and Acadia Pharmaceuticals (ACAD - Free Report) , both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 90 days, the Zacks Consensus Estimate for ADC Therapeutics has widened from a loss of $2.60 per share to a loss of $2.61 for 2023. The consensus estimate has narrowed from a loss of $2.75 per share to a loss of $2.45 for 2024 during the same time frame. Shares of the company have lost 67.2% year to date.
ADCT’s earnings beat estimates in three of the trailing four quarters and missed the mark in one, delivering an average surprise of 10.70%.
In the past 90 days, the Zacks Consensus Estimate for Acadia Pharmaceuticals has narrowed from a loss of 58 cents per share to a loss of 31 cents for 2023. Shares of the company have rallied 83.2% year to date.
ACAD’s earnings beat estimates in two of the trailing four quarters and missed the mark in the other two, delivering an average negative surprise of 2.75%.