Marginal Earnings Miss at Alkermes - Analyst Blog


Alkermes ' ( ALKS ) adjusted earnings (including stock-based compensation expense but excluding other special items) of 12 cents per share for the 3-month period ended Sep 30, 2013 compared favorably with the year-ago earnings of 10 cents per share. The year-over-year growth in earnings was attributable to higher revenues. The Zacks Consensus Estimate hinted at earnings of 13 cents per share.

Total revenue for the 3-month period ended Sep 30, 2013 climbed 12.7% to $139.8 million. Results in the reported quarter were boosted by higher product sales. Alkermes' product portfolio has been strengthened significantly following its purchase of Elan Corporation 's ( ELN ) Elan Drug Technologies (EDT) unit in Sep 2011. Revenues surpassed the Zacks Consensus Estimate of $135 million.

For the 3-month period ended Sep 30, 2013, Alkermes recorded $62.6 million (up 24.5% year over year) of manufacturing and royalty revenues from its long-acting atypical antipsychotic franchise comprising Risperdal Consta and Invega Sustenna/Xeplion.

The drugs are marketed by Johnson & Johnson ( JNJ ). Alkermes recorded manufacturing and royalty revenues of $12.6 million (up 152% year over year) from Ampyra (EU trade name: Fampyra). Alkermes earned royalty revenues of $7 million from type II diabetes treatment Bydureon, as opposed to $3 million in the year-ago period. Bydureon is co-marketed with Bristol-Myers Squibb Company ( BMY ).

Vivitrol, a legacy Alkermes product, performed well during the 3-month period. Sales of the product climbed approximately 26% to $19.2 million. Alkermes also earned revenues from TriCor 145 ($3.5 million) and Ritalin LA/Focalin XR franchise ($9.2 million) and Verelan ($4.4 million). Reported total expenses were $143.7 million during the period, up from the year-ago figure of $118.6 million.

We note that in May 2013, Alkermes had announced a change in its fiscal year end from Mar 31 to Dec. 31. The company maintained its outlook (provided in May) for the 9-month period starting from Apr 2013 to Dec 2013 for all items apart from selling, general and administrative (SG&A) expenses.

SG&A expenses for the 9- month period are now projected in the range of $105-$115 million (old guidance: $95-$105 million). The increase was due to activities related to the potential launch of phase III schizophrenia candidate aripiprazole lauroxil. The rise in SG&A guidance also reflects the company's increased investment on Vivitrol. Alkermes still expects adjusted earnings for the period to be in the range of $0.61 - $0.75 per share. Revenues for the 9-month period are projected in the range of $395 - $425 million.

Alkermes currently carries a Zacks Rank #3 (Hold). Johnson & Johnson looks attractive with a Zacks Rank #2 (Buy).

ALKERMES INC (ALKS): Free Stock Analysis Report

BRISTOL-MYERS (BMY): Free Stock Analysis Report

ELAN CP PLC ADR (ELN): Free Stock Analysis Report

JOHNSON & JOHNS (JNJ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: ALKS , BMY , EDT , ELN , JNJ

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