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Alkermes (ALKS) Q3 Loss in Line, Sales Miss; '16 View Intact
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Alkermes plc (ALKS - Free Report) reported a loss of 25 cents per share (including the impact of share-based compensation expense) in the third quarter of 2016, in line with the Zacks Consensus Estimate. The reported loss was, however, narrower than the year-ago tally of 43 cents.
Alkermes reported revenues of $180.2 million in the third quarter of 2016, up 18.1% year over year. However, quarterly revenues were below the Zacks Consensus Estimate of $188.4 million.
Vivitrol & Aristada in Focus
Manufacturing and royalty revenues declined 3.4% year over year to $110.3 million. Manufacturing revenues from Risperdal Consta, and royalty revenues from Risperdal Consta, Invega Sustenna/Xeplion and Invega Trinza/Trevicta were up 8.4% to $73.3 million. Manufacturing and royalty revenues from Ampyra/Fampyra, however, tumbled 41.6% to $12.9 million, reflecting the timing of manufacturing shipments.
The company earned royalty revenues of $11.6 million on Bydureon, down 10.8%.
Vivitrol sales surged 47.2% year over year to $55.8 million, reflecting robust growth in both the Medicaid and commercial segments.
Aristada sales came in at $14 million, up approximately 36% sequentially. Launch of Aristada in the long-acting antipsychotic market continues to be on track as the company works on securing reimbursement and access.
Research & development (R&D) expenses amounted to $99.4 million, up 7.4% from the year-ago period. Also, selling, general and administrative (SG&A) spending inched up 1.8% to $91.1 million.
2016 Outlook Maintained
Alkermes maintained the financial outlook for 2016 that was provided at the time of its second-quarter 2016 earnings release. The company continues to expect total revenue in the range of $710 million to $760 million and loss in the range of 3 to 23 cents.
Vivitrol net sales are still expected in the range of $190 million to $210 million.
R&D and SG&A expenses are still projected in the range of $370–$400 million and $360–$390 million, respectively.
Meanwhile, Alkermes expects Aristada sales in the range of $16–$19 million in the fourth quarter of 2016.
Pipeline Update
Alkermes continues to progress with its late-stage pipeline candidates. Phase III studies evaluating ALKS 3831 (schizophrenia) and ALKS 8700 (multiple sclerosis) are well underway.
In Oct 2016, Alkermes reported positive top-line data from the third phase III efficacy study, FORWARD-5, evaluating ALKS 5461 for the adjunctive treatment of major depressive disorder (MDD) in patients who have an inadequate response to standard antidepressant therapies.
On the basis of FORWARD-5 study data as well as a considerable amount of data collected to date on the efficacy and safety of ALKS 5461 for the treatment of MDD, the company plans to request a meeting with the FDA’s Division of Psychiatric Products on the regulatory path ahead for the candidate. The meeting is anticipated in the first quarter of 2017.
Meanwhile, a supplemental new drug application for a two-month dosing interval of Aristada is currently under FDA review. A response from the agency is expected in Jun 2017.
Alkermes’ third-quarter results were disappointing with the company missing top-line estimates, even though the quarterly loss was in line with expectations. The company’s royalty and manufacturing business recorded a year-over-over decline. However, revenues were driven by encouraging performance of Vivitrol and Aristada. The company continues to view both Vivitrol and Aristada as long-term growth drivers. While Vivitrol should benefit from the newly passed Comprehensive Addiction Recovery Act, gaining reimbursement and access for Aristada should work well for the latter. Meanwhile, Alkermes has maintained its outlook for 2016.
On the other hand, the company’s progress with its pipeline is impressive. Going forward, focus should remain on the same as important updates are expected over the coming months.
Zacks Rank & Stocks to Consider
Alkermes is a Zacks Rank #4 (Sell) stock. Some better-ranked stocks in the health care sector include Exelixis, Inc. (EXEL - Free Report) , Infinity Pharmaceuticals, Inc. and Geron Corporation (GERN - Free Report) . While Infinity and Geron sport a Zacks Rank #1 (Strong Buy), Exelixis carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Infinity’s loss per share estimates narrowed from $3.84 to $3.79 for 2016 but has remained stable for 2017 over the last 60 days. The company has posted a positive surprise in all the four trailing quarters with an average beat of 67.62%.
Exelixis’ loss per share estimates narrowed from 71 cents to 61 cents for 2016 and from a loss of 19 cents to earnings of 4 cents for 2017 over the last 60 days. The company has posted an average positive surprise of 9.10% over the trailing four quarters. Its share price has jumped more than 90% year to date.
Geron has posted a positive earnings surprise in all of the four trailing quarters with an average beat of 20.78%.
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Alkermes (ALKS) Q3 Loss in Line, Sales Miss; '16 View Intact
Alkermes plc (ALKS - Free Report) reported a loss of 25 cents per share (including the impact of share-based compensation expense) in the third quarter of 2016, in line with the Zacks Consensus Estimate. The reported loss was, however, narrower than the year-ago tally of 43 cents.
Alkermes reported revenues of $180.2 million in the third quarter of 2016, up 18.1% year over year. However, quarterly revenues were below the Zacks Consensus Estimate of $188.4 million.
Vivitrol & Aristada in Focus
Manufacturing and royalty revenues declined 3.4% year over year to $110.3 million. Manufacturing revenues from Risperdal Consta, and royalty revenues from Risperdal Consta, Invega Sustenna/Xeplion and Invega Trinza/Trevicta were up 8.4% to $73.3 million. Manufacturing and royalty revenues from Ampyra/Fampyra, however, tumbled 41.6% to $12.9 million, reflecting the timing of manufacturing shipments.
The company earned royalty revenues of $11.6 million on Bydureon, down 10.8%.
Vivitrol sales surged 47.2% year over year to $55.8 million, reflecting robust growth in both the Medicaid and commercial segments.
Aristada sales came in at $14 million, up approximately 36% sequentially. Launch of Aristada in the long-acting antipsychotic market continues to be on track as the company works on securing reimbursement and access.
Research & development (R&D) expenses amounted to $99.4 million, up 7.4% from the year-ago period. Also, selling, general and administrative (SG&A) spending inched up 1.8% to $91.1 million.
2016 Outlook Maintained
Alkermes maintained the financial outlook for 2016 that was provided at the time of its second-quarter 2016 earnings release. The company continues to expect total revenue in the range of $710 million to $760 million and loss in the range of 3 to 23 cents.
Vivitrol net sales are still expected in the range of $190 million to $210 million.
R&D and SG&A expenses are still projected in the range of $370–$400 million and $360–$390 million, respectively.
Meanwhile, Alkermes expects Aristada sales in the range of $16–$19 million in the fourth quarter of 2016.
Pipeline Update
Alkermes continues to progress with its late-stage pipeline candidates. Phase III studies evaluating ALKS 3831 (schizophrenia) and ALKS 8700 (multiple sclerosis) are well underway.
In Oct 2016, Alkermes reported positive top-line data from the third phase III efficacy study, FORWARD-5, evaluating ALKS 5461 for the adjunctive treatment of major depressive disorder (MDD) in patients who have an inadequate response to standard antidepressant therapies.
On the basis of FORWARD-5 study data as well as a considerable amount of data collected to date on the efficacy and safety of ALKS 5461 for the treatment of MDD, the company plans to request a meeting with the FDA’s Division of Psychiatric Products on the regulatory path ahead for the candidate. The meeting is anticipated in the first quarter of 2017.
Meanwhile, a supplemental new drug application for a two-month dosing interval of Aristada is currently under FDA review. A response from the agency is expected in Jun 2017.
ALKERMES INC Price, Consensus and EPS Surprise
ALKERMES INC Price, Consensus and EPS Surprise | ALKERMES INC Quote
Our Take
Alkermes’ third-quarter results were disappointing with the company missing top-line estimates, even though the quarterly loss was in line with expectations. The company’s royalty and manufacturing business recorded a year-over-over decline. However, revenues were driven by encouraging performance of Vivitrol and Aristada. The company continues to view both Vivitrol and Aristada as long-term growth drivers. While Vivitrol should benefit from the newly passed Comprehensive Addiction Recovery Act, gaining reimbursement and access for Aristada should work well for the latter. Meanwhile, Alkermes has maintained its outlook for 2016.
On the other hand, the company’s progress with its pipeline is impressive. Going forward, focus should remain on the same as important updates are expected over the coming months.
Zacks Rank & Stocks to Consider
Alkermes is a Zacks Rank #4 (Sell) stock. Some better-ranked stocks in the health care sector include Exelixis, Inc. (EXEL - Free Report) , Infinity Pharmaceuticals, Inc. and Geron Corporation (GERN - Free Report) . While Infinity and Geron sport a Zacks Rank #1 (Strong Buy), Exelixis carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Infinity’s loss per share estimates narrowed from $3.84 to $3.79 for 2016 but has remained stable for 2017 over the last 60 days. The company has posted a positive surprise in all the four trailing quarters with an average beat of 67.62%.
Exelixis’ loss per share estimates narrowed from 71 cents to 61 cents for 2016 and from a loss of 19 cents to earnings of 4 cents for 2017 over the last 60 days. The company has posted an average positive surprise of 9.10% over the trailing four quarters. Its share price has jumped more than 90% year to date.
Geron has posted a positive earnings surprise in all of the four trailing quarters with an average beat of 20.78%.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>