Exhibit 99.1
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| Alkermes Contacts: |
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| For Investors: | Sandy Coombs +1 781 609 6377 |
| For Media: | Katie Joyce +1 781 249 8927 |
Alkermes plc Reports Second Quarter 2023 Financial Results
— Second Quarter Revenues of $617.4 Million Reflect Strong Performance of Proprietary Product Portfolio and Reinstatement of Long-Acting INVEGA® Product Royalties —
— Net Sales of Proprietary Products Increased Approximately 21% Year-Over-Year —
— Prevailed in Janssen Arbitration; Recorded $248.4 Million in Back Royalties and Interest —
— GAAP Net Income of $237.1 Million and Non-GAAP Net Income of $94.3 Million —
— Financial Expectations for Full-Year 2023 Reiterated —
DUBLIN, July 26, 2023 — Alkermes plc (Nasdaq: ALKS) today reported financial results for the second quarter of 2023.
“The second quarter clearly demonstrated Alkermes’ strong execution against our strategic priorities. We generated double-digit growth of our proprietary commercial products, advanced our development pipeline, and progressed the planned separation of our oncology business,” said Richard Pops, Chief Executive Officer of Alkermes. “As we enter the second half of the year, we are well positioned to continue to make meaningful progress across the business and drive shareholder value.”
“Our second quarter results reflect solid execution across our portfolio, highlighted by 21% year-over-year growth of our proprietary commercial products and reinstatement of the long-acting INVEGA product royalties in the U.S.,” commented Iain Brown, Chief Financial Officer of Alkermes. “We are in a strong financial position with more than $907 million of cash and total investments and, today, we are reiterating our financial expectations for 2023 that were provided in June following receipt of the favorable final award in our arbitration with Janssen. We continue to expect royalty revenues from Janssen for these long-acting INVEGA products to be incrementally accretive to Alkermes’ bottom line in 2023 and beyond, as we continue to manage our business to drive profitability for the benefit of Alkermes’ shareholders.”
Quarter Ended June 30, 2023 Financial Results
Revenues
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Costs and Expenses
Profitability
Balance Sheet
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Financial Expectations for 2023
Alkermes reiterated its financial expectations for 2023, as set forth in its press release dated June 6, 2023.
Separation of Oncology Business
Alkermes continues to make meaningful progress on the previously announced planned separation of its oncology business into a new, independent publicly-traded company. The separation would allow Alkermes to maintain its focus on researching, developing and commercializing therapies for people living with complex neurological conditions and is expected to accelerate and enhance the profitability of the remaining neuroscience business.
Recent Events
Corporate
Neuroscience
Oncology
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Conference Call
Alkermes will host a conference call and webcast presentation with accompanying slides at 8:00 a.m. ET (1:00 p.m. BST) on Wednesday, July 26, 2023, to discuss these financial results and provide an update on the company. The webcast may be accessed on the Investors section of Alkermes’ website at www.alkermes.com. The conference call may be accessed by dialing +1 877 407 2988 for U.S. callers and +1 201 389 0923 for international callers. In addition, a replay of the conference call may be accessed by visiting Alkermes’ website.
About Alkermes plc
Alkermes plc is a fully-integrated, global biopharmaceutical company developing innovative medicines in the fields of neuroscience and oncology. The company has a portfolio of proprietary commercial products focused on alcohol dependence, opioid dependence, schizophrenia and bipolar I disorder, and a pipeline of product candidates in development for neurological disorders and cancer. Headquartered in Dublin, Ireland, Alkermes has a research and development center in Waltham, Massachusetts; a research and manufacturing facility in Athlone, Ireland; and a manufacturing facility in Wilmington, Ohio. For more information, please visit Alkermes’ website at www.alkermes.com.
Non-GAAP Financial Measures
This press release includes information about certain financial measures that are not prepared in accordance with GAAP, including non-GAAP net income and non-GAAP basic and diluted earnings per share. These non-GAAP measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies.
Non-GAAP net income adjusts for certain one-time and non-cash charges by excluding from GAAP results: share-based compensation expense; amortization; depreciation; non-cash net interest expense; change in the fair value of contingent consideration; certain other one-time or non-cash items; and the income tax effect of these reconciling items.
The company’s management and board of directors utilize these non-GAAP financial measures to evaluate the company’s performance. The company provides these non-GAAP financial measures of the company’s performance to investors because management believes that these non-GAAP financial measures, when viewed with the company’s results under GAAP and the accompanying reconciliations, are useful in identifying underlying trends in ongoing operations. However, non-GAAP net income and non-GAAP basic and diluted earnings per share are not measures of financial performance under GAAP and, accordingly, should not be considered as alternatives to GAAP measures as indicators of operating performance. Further, non-GAAP net income and non-GAAP basic and diluted earnings per share should not be considered measures of the company’s liquidity.
A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables included in this press release.
Note Regarding Forward-Looking Statements
Certain statements set forth in this press release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including, but not limited to, statements concerning: the company’s expectations concerning its future financial and operating performance, business plans or prospects, including its ability to drive profitability and create value for shareholders; the company’s expectations regarding the future royalties to be received from Janssen; the company’s expectations regarding the timing, structure, anticipated benefits and other impacts of the planned separation of its oncology business; and the therapeutic and commercial potential of the company’s products. The company cautions that forward-looking statements are inherently uncertain. The forward-looking statements are neither promises nor guarantees and they are necessarily subject to a high
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degree of uncertainty and risk. Actual performance and results may differ materially from those expressed or implied in the forward-looking statements due to various risks and uncertainties. These risks and uncertainties include, among others: the company may not ultimately separate its oncology business during 2023 or at all; unanticipated developments, costs or difficulties that may delay or otherwise negatively affect the planned separation of the company’s oncology business; the planned separation may adversely impact the company’s ability to attract or retain key personnel; the unfavorable outcome of arbitration or litigation, including so-called “Paragraph IV” litigation and other patent litigation which may lead to competition from generic drug manufacturers, or other disputes related to the company’s products or products using the company’s proprietary technologies; clinical development activities may not be completed on time or at all; the results of the company’s development activities may not be positive, or predictive of final results from such activities, results of future development activities or real-world results; the U.S. Food and Drug Administration (FDA) or regulatory authorities outside the U.S. may not agree with the company’s regulatory approval strategies or components of the company’s marketing applications; the FDA or regulatory authorities outside the U.S. may make adverse decisions regarding the company’s products; the company and its licensees may not be able to continue to successfully commercialize their products or support revenue growth from such products; there may be a reduction in payment rate or reimbursement for the company’s products or an increase in the company’s financial obligations to government payers; the company’s products may prove difficult to manufacture, be precluded from commercialization by the proprietary rights of third parties, or have unintended side effects, adverse reactions or incidents of misuse; and those risks and uncertainties described under the heading “Risk Factors” in the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2022 and the company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 and in subsequent filings made by the company with the U.S. Securities and Exchange Commission (SEC), which are available on the SEC’s website at www.sec.gov. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except as required by law, the company disclaims any intention or responsibility for updating or revising any forward-looking statements contained in this press release.
VIVITROL® is a registered trademark of Alkermes, Inc.; ARISTADA®, ARISTADA INITIO® and LYBALVI® are registered trademarks of Alkermes Pharma Ireland Limited, used by Alkermes, Inc. under license; BYANNLI®, INVEGA®, INVEGA HAFYERA®, INVEGA SUSTENNA®, INVEGA TRINZA®, TREVICTA® and XEPLION® are registered trademarks of Johnson & Johnson or its affiliated companies; CABENUVA® is a registered trademark of ViiV Healthcare UK (No.3) Limited; and VUMERITY® is a registered trademark of Biogen MA Inc., used by Alkermes under license.
(tables follow)
i | The term “ARISTADA” as used in this press release refers to ARISTADA and ARISTADA INITIO®, unless the context indicates otherwise. |
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Alkermes plc and Subsidiaries |
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Selected Financial Information (Unaudited) |
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Condensed Consolidated Statements of Operations - GAAP |
| Three Months Ended |
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| Three Months Ended |
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(In thousands, except per share data) |
| June 30, 2023 |
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| June 30, 2022 |
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Revenues: |
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Product sales, net |
| $ | 231,477 |
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| $ | 190,787 |
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Manufacturing and royalty revenues |
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| 385,913 |
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| 85,326 |
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Research and development revenue |
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| 7 |
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| 106 |
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Total Revenues |
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| 617,397 |
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| 276,219 |
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Expenses: |
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Cost of goods manufactured and sold |
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| 63,260 |
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| 58,360 |
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Research and development |
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| 100,788 |
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| 92,873 |
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Selling, general and administrative |
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| 205,258 |
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| 150,377 |
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Amortization of acquired intangible assets |
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| 8,898 |
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| 9,066 |
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Total Expenses |
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| 378,204 |
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| 310,676 |
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Operating Income (Loss) |
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| 239,193 |
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| (34,457 | ) |
Other Income, net: |
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Interest income |
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| 6,769 |
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| 896 |
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Interest expense |
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| (5,684 | ) |
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| (2,369 | ) |
Other (expense) income, net |
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| (525 | ) |
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| 1,810 |
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Change in the fair value of contingent consideration |
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| — |
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| 870 |
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Total Other Income, net |
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| 560 |
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| 1,207 |
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Income (Loss) Before Income Taxes |
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| 239,753 |
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| (33,250 | ) |
Income Tax Provision (Benefit) |
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| 2,688 |
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| (3,114 | ) |
Net Income (Loss) — GAAP |
| $ | 237,065 |
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| $ | (30,136 | ) |
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Earnings (Loss) Per Share: |
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GAAP earnings (loss) per share — basic |
| $ | 1.43 |
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| $ | (0.18 | ) |
GAAP earnings (loss) per share — diluted |
| $ | 1.38 |
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| $ | (0.18 | ) |
Non-GAAP earnings per share — basic |
| $ | 0.57 |
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| $ | 0.06 |
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Non-GAAP earnings per share — diluted |
| $ | 0.55 |
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| $ | 0.06 |
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Weighted Average Number of Ordinary Shares Outstanding: |
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Basic — GAAP and Non-GAAP |
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| 166,279 |
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| 163,839 |
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Diluted — GAAP |
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| 171,553 |
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| 163,839 |
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Diluted — Non-GAAP |
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| 171,553 |
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| 168,706 |
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An itemized reconciliation between net income (loss) on a GAAP basis and non-GAAP net income is as follows: |
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Net Income (Loss) — GAAP |
| $ | 237,065 |
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| $ | (30,136 | ) |
Adjustments: |
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Share-based compensation expense |
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| 28,504 |
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| 23,377 |
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Depreciation expense |
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| 10,114 |
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| 10,326 |
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Amortization expense |
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| 8,898 |
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| 9,066 |
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Final award in the Janssen arbitration (2022 back royalties and interest) |
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| (197,092 | ) |
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| — |
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Separation expense |
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| 5,857 |
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| — |
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Income tax effect related to reconciling items |
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| 816 |
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| (1,383 | ) |
Non-cash net interest expense |
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| 115 |
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| 117 |
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Change in the fair value of contingent consideration and other related assets |
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| — |
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| (870 | ) |
Non-GAAP Net Income |
| $ | 94,277 |
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| $ | 10,497 |
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Alkermes plc and Subsidiaries |
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Selected Financial Information (Unaudited) |
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Condensed Consolidated Statements of Operations - GAAP |
| Six Months Ended |
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| Six Months Ended |
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(In thousands, except per share data) |
| June 30, 2023 |
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| June 30, 2022 |
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Revenues: |
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Product sales, net |
| $ | 446,204 |
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| $ | 362,055 |
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Manufacturing and royalty revenues |
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| 458,775 |
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| 190,496 |
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License revenue |
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| — |
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| 2,000 |
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Research and development revenue |
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| 13 |
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| 213 |
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Total Revenues |
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| 904,992 |
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| 554,764 |
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Expenses: |
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Cost of goods manufactured and sold |
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| 121,435 |
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| 113,519 |
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Research and development |
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| 194,425 |
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| 188,826 |
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Selling, general and administrative |
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| 379,735 |
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| 295,429 |
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Amortization of acquired intangible assets |
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| 17,698 |
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| 18,032 |
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Total Expenses |
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| 713,293 |
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| 615,806 |
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Operating Income (Loss) |
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| 191,699 |
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| (61,042 | ) |
Other Income (Expense), net: |
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Interest income |
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| 11,735 |
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| 1,469 |
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Interest expense |
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| (10,972 | ) |
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| (4,719 | ) |
Other (expense) income, net |
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| (564 | ) |
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| 4,241 |
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Change in the fair value of contingent consideration |
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| — |
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| (18,197 | ) |
Total Other Income (Expense), net |
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| 199 |
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| (17,206 | ) |
Income (Loss) Before Income Taxes |
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| 191,898 |
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| (78,248 | ) |
Income Tax Benefit |
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| (3,322 | ) |
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| (12,209 | ) |
Net Income (Loss) — GAAP |
| $ | 195,220 |
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| $ | (66,039 | ) |
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Earnings (Loss) Per Share: |
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GAAP earnings (loss) per share — basic |
| $ | 1.18 |
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| $ | (0.40 | ) |
GAAP earnings (loss) per share — diluted |
| $ | 1.14 |
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| $ | (0.40 | ) |
Non-GAAP earnings per share — basic |
| $ | 0.58 |
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| $ | 0.18 |
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Non-GAAP earnings per share — diluted |
| $ | 0.57 |
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| $ | 0.18 |
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Weighted Average Number of Ordinary Shares Outstanding: |
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Basic — GAAP and Non-GAAP |
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| 165,686 |
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| 163,165 |
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Diluted — GAAP |
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| 170,747 |
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| 163,165 |
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Diluted — Non-GAAP |
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| 170,747 |
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| 167,372 |
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An itemized reconciliation between net income (loss) on a GAAP basis and non-GAAP net income is as follows: |
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Net Income (Loss) — GAAP |
| $ | 195,220 |
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| $ | (66,039 | ) |
Adjustments: |
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Share-based compensation expense |
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| 51,147 |
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| 41,720 |
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Depreciation expense |
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| 20,028 |
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| 20,557 |
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Amortization expense |
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| 17,698 |
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| 18,032 |
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Final award in the Janssen arbitration (2022 back royalties and interest) |
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| (197,092 | ) |
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| 0 |
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Separation expense |
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| 9,640 |
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| — |
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Income tax effect related to reconciling items |
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| (179 | ) |
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| (2,576 | ) |
Non-cash net interest expense |
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| 231 |
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| 234 |
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Reduction in the fair value of contingent consideration and other related assets |
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| — |
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| 18,197 |
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Non-GAAP Net Income |
| $ | 96,693 |
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| $ | 30,125 |
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Alkermes plc and Subsidiaries |
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Selected Financial Information (Unaudited) |
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Condensed Consolidated Balance Sheets |
| June 30, |
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| December 31, |
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(In thousands) |
| 2023 |
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| 2022 |
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Cash, cash equivalents and total investments |
| $ | 907,176 |
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| $ | 740,075 |
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Receivables |
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| 334,478 |
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| 287,967 |
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Inventory |
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| 189,372 |
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| 181,418 |
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Contract assets |
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| — |
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| 8,929 |
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Prepaid expenses and other current assets |
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| 44,452 |
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| 43,527 |
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Property, plant and equipment, net |
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| 323,801 |
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| 325,361 |
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Intangible assets, net and goodwill |
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| 112,855 |
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| 130,553 |
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Deferred tax assets |
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| 153,152 |
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| 115,602 |
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Other assets |
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| 121,898 |
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| 130,546 |
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Total Assets |
| $ | 2,187,184 |
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| $ | 1,963,978 |
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Accounts payable and accrued expenses |
| $ | 465,691 |
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| $ | 472,204 |
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Long-term debt — current portion |
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| 3,000 |
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| 3,000 |
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Other current liabilities |
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| 18,494 |
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| 22,538 |
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Long-term debt |
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| 289,001 |
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| 290,270 |
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Other long-term liabilities |
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| 130,561 |
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| 132,213 |
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Total shareholders' equity |
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| 1,280,437 |
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| 1,043,753 |
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Total Liabilities and Shareholders' Equity |
| $ | 2,187,184 |
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| $ | 1,963,978 |
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Ordinary shares outstanding (in thousands) |
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| 166,498 |
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| 164,377 |
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This selected financial information should be read in conjunction with the consolidated financial statements and notes thereto included in Alkermes plc's Quarterly Report on Form 10-Q for the three and six months ended June 30, 2023, which the company intends to file in July 2023. |
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