Alkermes (ALKS) reported a loss of 25 cents per share in the third quarter of 2014, much wider than the loss of 5 cents incurred in the year-ago quarter. The Zacks Consensus Estimate was a loss of 12 cents per share.
Alkermes reported revenues of $159.9 million for the third quarter of 2014, up 14.4% year over year. Revenues were above the Zacks Consensus Estimate of $156.7 million. Shares of Alkermes have been rising consistently since the announcement of the third quarter results. Overall, shares are up 7.7% since the announcement.
Quarter in Details
Manufacturing and royalty revenues at Alkermes climbed 11.3% to $132 million in the reported quarter leading to the top-line beat. Manufacturing and royalty revenues included $68.5 million (up 9.4%) from the company’s long-acting atypical antipsychotic franchise, Risperdal Consta and Invega Sustenna/Xeplion.
Alkermes recorded manufacturing and royalty revenues of $16.5 million (up 31%) on Ampyra (EU trade name: Fampyra).
Alkermes earned royalty revenues of $10.3 million (up 47.1%) on Bydureon. The company has an agreement with AstraZeneca (AZN) for Bydureon. Last month, AstraZeneca launched the Bydureon dual-chamber pen device in the U.S.
Alkermes also earned revenues on Emend ($4.4 million), Ritalin LA/Focalin XR franchise ($8.7 million) and Verelan ($6.3 million). Vivitrol sales climbed 34.4% to $25.8 million in the reported quarter.
R&D expenses for the third quarter increased 70.3% to $78.3 million. The increase was attributable to Alkermes’ efforts to develop its pipeline.
SG&A spending shot up 31.5% from the year-ago quarter to $51.9 million. Costs associated with the marketing of Vivitrol and sales activity in anticipation of the potential launch of aripiprazole lauroxil (under FDA review for schizophrenia with a response expected by Aug 22, 2015) pushed up SG&A expenses.
Aripiprazole lauroxil’s approval would boost Alkermes' top line since the schizophrenia market offers significant commercial potential. Alkermes expects to move a once every two months dosing regimen of aripiprazole lauroxil into the clinic by the end of 2014.
2014 Outlook
Alkermes' 2014 guidance includes the impact of the Civitas Therapeutics acquisition by Acorda Therapeutics (ACOR) completed in September this year. Alkermes’ balance sheet will be boosted by roughly $60 million as it had a stake in the acquired company.
The company continues to expect loss per share in the range of 19 cents to 32 cents. The Zacks Consensus Estimate currently stands at a loss of 25 cents per share.
Alkermes continues to expect total revenues in the range of $580 million to $610 million. The Zacks Consensus Estimate of $600 million is towards the higher end of the guidance range.
The company continues to expect R&D spend in the range of $260 million to $280 million. SG&A guidance also remains unchanged at $190–$200 million.
Alkermes currently carries a Zacks Rank #4 (Sell). A better-ranked stock in the health care sector is Biogen Idec Inc. (BIIB) carrying a Zacks Rank #1 (Strong Buy).
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