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Alkermes (ALKS) Down Despite Q3 Earnings & Revenue Beat
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Alkermes plc (ALKS - Free Report) reported third-quarter 2023 adjusted earnings of 64 cents per share, which comprehensively beat the Zacks Consensus Estimate of 44 cents. The company had reported adjusted earnings of 2 cents per share in the year-ago quarter.
The company’s revenues of $380.9 million surged 50.9% from the year-ago quarter owing to strong performance of the company’s proprietary products portfolio. The top line also beat the Zacks Consensus Estimate of $366 million.
Despite the better-than-expected results, shares of Alkermes were down 7.4% on Wednesday.
Alkermes' stock has lost 10.3% year to date compared with the industry’s decline of 21.6%.
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 181.8% year over year to $149.1 million owing to the reinstatement of royalties on sales of long-acting Invega in the United States by Janssen, a subsidiary of J&J (JNJ - Free Report) .
In June 2023, Alkermes received a final award in its arbitration proceedings with Janssen. 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 31.5% year over year to $34.6 million. Royalty revenues from Vumerity surpassed the Zacks Consensus Estimate and our model estimate of $33.2 and $29.5 million, respectively.
Sales of the proprietary drug, Vivitrol, increased around 3% year over year to $99.3 million, driven primarily by growth in the alcohol dependence indication. The figure missed the Zacks Consensus Estimate of $104 million and our model estimate of $104.7 million.
Sales for Aristada increased 8% year over year to $81.8 million, driven primarily by higher underlying demand. The figure missed the Zacks Consensus Estimate and our model estimate of $85 million and $84.5 million, respectively.
Lybalvi generated sales of $50.7 million. Sales of the drug increased 87.1% year over year and 8% sequentially, primarily driven by growth in demand. However, Lybalvi sales missed the Zacks Consensus Estimate and our model estimate of $54 million and $54.6 million, respectively.
Research and development expenses totaled $97.1 million, down 3.3% year over year. The decline was due to reduced expenses for the advancement of clinical studies for nemvaleukin alfa and Lybalvi.
Selling, general and administrative expenses totaled $169.4 million, up 10.8% 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 Sep 30, 2023, Alkermes had cash and cash equivalents of $995.6 million compared with $907.2 million as of Jun 30, 2023. Total outstanding debt was $291.4 million as of Sep 30, 2023.
2023 Guidance
The company reiterated its full-year revenue guidance for 2023 that it had issued on Jun 6, 2023.
It continues to expect total revenues in the band of $1.55-$1.68 billion.
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 solely on developing therapies for neurological conditions and improving profitability.
ALKS expects to complete the separation in November 2023, subject to various customary conditions.
In August 2023, Alkermes started negotiations with Teva Pharmaceuticals USA, Inc. (TEVA - Free Report) to settle the ongoing patent litigation between the parties in the U.S. District Court regarding Vivitrol (naltrexone for extended-release injectable suspension).
Per the terms of the settlement agreement, Alkermes granted Teva a license to market a generic version of Vivitrol in the United States from Jan 15, 2027, or earlier under certain customary circumstances.
However, ALKS and TEVA are required to submit the agreement to the U.S. Federal Trade Commission and the U.S. Department of Justice for review.
In the past 60 days, estimates for Dynavax Technologies’ 2023 loss per share have narrowed from 24 cents to 22 cents. Meanwhile, during the same period, earnings per share estimates for 2024 have improved from 2 cents to 8 cents. Year to date, shares of DVAX have rallied 31%.
Earnings of Dynavax Technologies beat estimates in two of the last four quarters while missing the same on the remaining two occasions. DVAX delivered a four-quarter average earnings surprise of 25.78%.
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Alkermes (ALKS) Down Despite Q3 Earnings & Revenue Beat
Alkermes plc (ALKS - Free Report) reported third-quarter 2023 adjusted earnings of 64 cents per share, which comprehensively beat the Zacks Consensus Estimate of 44 cents. The company had reported adjusted earnings of 2 cents per share in the year-ago quarter.
The company’s revenues of $380.9 million surged 50.9% from the year-ago quarter owing to strong performance of the company’s proprietary products portfolio. The top line also beat the Zacks Consensus Estimate of $366 million.
Despite the better-than-expected results, shares of Alkermes were down 7.4% on Wednesday.
Alkermes' stock has lost 10.3% year to date compared with the industry’s decline of 21.6%.
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 181.8% year over year to $149.1 million owing to the reinstatement of royalties on sales of long-acting Invega in the United States by Janssen, a subsidiary of J&J (JNJ - Free Report) .
In June 2023, Alkermes received a final award in its arbitration proceedings with Janssen. 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 31.5% year over year to $34.6 million. Royalty revenues from Vumerity surpassed the Zacks Consensus Estimate and our model estimate of $33.2 and $29.5 million, respectively.
Sales of the proprietary drug, Vivitrol, increased around 3% year over year to $99.3 million, driven primarily by growth in the alcohol dependence indication. The figure missed the Zacks Consensus Estimate of $104 million and our model estimate of $104.7 million.
Sales for Aristada increased 8% year over year to $81.8 million, driven primarily by higher underlying demand. The figure missed the Zacks Consensus Estimate and our model estimate of $85 million and $84.5 million, respectively.
Lybalvi generated sales of $50.7 million. Sales of the drug increased 87.1% year over year and 8% sequentially, primarily driven by growth in demand. However, Lybalvi sales missed the Zacks Consensus Estimate and our model estimate of $54 million and $54.6 million, respectively.
Research and development expenses totaled $97.1 million, down 3.3% year over year. The decline was due to reduced expenses for the advancement of clinical studies for nemvaleukin alfa and Lybalvi.
Selling, general and administrative expenses totaled $169.4 million, up 10.8% 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 Sep 30, 2023, Alkermes had cash and cash equivalents of $995.6 million compared with $907.2 million as of Jun 30, 2023. Total outstanding debt was $291.4 million as of Sep 30, 2023.
2023 Guidance
The company reiterated its full-year revenue guidance for 2023 that it had issued on Jun 6, 2023.
It continues to expect total revenues in the band of $1.55-$1.68 billion.
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 solely on developing therapies for neurological conditions and improving profitability.
ALKS expects to complete the separation in November 2023, subject to various customary conditions.
In August 2023, Alkermes started negotiations with Teva Pharmaceuticals USA, Inc. (TEVA - Free Report) to settle the ongoing patent litigation between the parties in the U.S. District Court regarding Vivitrol (naltrexone for extended-release injectable suspension).
Per the terms of the settlement agreement, Alkermes granted Teva a license to market a generic version of Vivitrol in the United States from Jan 15, 2027, or earlier under certain customary circumstances.
However, ALKS and TEVA are required to submit the agreement to the U.S. Federal Trade Commission and the U.S. Department of Justice for review.
Alkermes plc Price, Consensus and EPS Surprise
Alkermes plc price-consensus-eps-surprise-chart | Alkermes plc Quote
Zacks Rank & Stock to Consider
Alkermes currently carries a Zacks Rank #3 (Hold).
A top-ranked stock in the biotech sector is Dynavax Technologies Corporation (DVAX - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Dynavax Technologies’ 2023 loss per share have narrowed from 24 cents to 22 cents. Meanwhile, during the same period, earnings per share estimates for 2024 have improved from 2 cents to 8 cents. Year to date, shares of DVAX have rallied 31%.
Earnings of Dynavax Technologies beat estimates in two of the last four quarters while missing the same on the remaining two occasions. DVAX delivered a four-quarter average earnings surprise of 25.78%.