Alkermes Inc. (ALKS)
F4Q10 Earnings Call
May 13, 2010 4:30 pm ET
Richard Pops - Chairman, President & Chief Executive Officer
Jim Frates - Chief Financial Officer
Rebecca Peterson - Vice President of Corporate Communications
Cory Kasimov - JPMorgan
Steve Yoo - Leerink Swann
Dave Windley - Jefferies & Co.
Tom Russo - Barred
Scott Henry - Roth Capital
Terence Flynn - Lazard Capital Markets
Ian Sanderson - Cowen & Co.
Previous Statements by ALKS
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I will now turn the call over to Ms. Rebecca Peterson. Ms. Peterson you may begin.
Thanks very much John. Good afternoon, and welcome to the Alkermes conference call to discuss our financial results for fiscal year 2010, and our financial expectations for fiscal 2011. With me this afternoon are Richard Pops, Chairman, President and CEO of Alkermes; and Jim Frates, our CFO.
Before we begin, let me remind you that during the call today, we will make forward-looking statements relating to among other things, our expectations concerning the commercialization of RISPERDAL CONSTA, VIVITROL, and BYDUREON, our future financial expectations and business performance, our expectations concerning future of the business development transactions, and our expectations concerning the therapeutic value and development product candidates.
Listeners are cautioned that these statements are neither promises nor guarantees, but are subject to risks and uncertainties that could change our actual results to differ materially from the results contemplated by these forward-looking statements. You can find a list and detailed description of these and other risks in our Annual Report on Form 10-K, and Quarterly Report on Form 10-Q, as well as in the other periodic reports filed with the SEC under the Securities and Exchange Act of 1934 as amended. We undertake no obligation to update or revise the information provided in the call today.
This afternoon, Jim will discuss our fiscal 2010 financial results and outline our expectations for fiscal 2011. Richard Pops will then provide an update on the company. After our remarks we will open up the call for Q-and-A.
Now, I’d like to turn over the call to Jim.
Thanks Rebecca. Good afternoon everyone. Fiscal year 2010 was an important year for us, and I think it exemplifies what makes Alkermes unique. We have a strong cash position, recurring cash flows from commercial product sales, disciplined financial management, and a pipeline that will provide the foundation for solid growth going forward.
In particular RISPERDAL CONSTA provided revenues approaching $150 million to Alkermes in fiscal 2010. RISPERDAL CONSTA remains a key brand in the antipsychotic space, and because of its long term protection, will remain an important source or revenue for years to come.
Building upon the source of revenue, we look forward to adding two entirely new revenue streams later this year, with the anticipated approvals of BYDUREON for type 2 diabetes, and VIVITROL for the treatment of opioid dependence.
Our financial strength has enabled us to invest in two new technology platforms, and advance six pipeline candidates just in the last year. As Rich will describe, we selected candidates that we believe are likely to succeed and provide value to patients and physicians in important medical markets such as CNS, reward disorders, opioid induced constipation, and inflammatory disease.
We designed our clinical program to rapidly provide information regarding the likelihood of success, and the potential of the drug, and expect key data from there programs before the fiscal year end.
Turing to our financial results, overall fiscal 2010 was a solid year financially. Both RISPERDAL CONSTA and VIVITROL achieved record annual sales. During the year the company recorded total revenues of approximately $178 million, at the mid point of our guidance range we provided in November. Specifically revenues were driven by the continued strength of RISPERDAL CONSTA, which grew operationally 11% year-over-year, based on roughly $1.5 million in end market sale.
During the fiscal year 79% of RISPERDAL CONSTA units were sold outside the United States. As J&J stated on its recent quarterly earnings call "Sales of RISPERDAL CONSTA outside the Untied States were up 21.4% operationally, with strong growth in all major regions."
RISPERDAL CONSTA remains the only long acting atypical antipsychotic approved for both, schizophrenia and bipolar I disorder in the United States, and is a gold standard long acting choice around the world. It has patent protection through 2020 in the United States, and 2021 in the EU, and we believe RISPERDAL CONSTA will continue to generate profitable revenue stream for us for years to come.
VIVITROL for alcohol dependence also exhibited progress this year, as evidenced by four consecutive quarters of growth. Net sales for VIVITROL increased to $5.9 million in the fourth quarter, a sequential increase of approximately 9% compared to the third fiscal quarter of 2010.
Total sales for VIVITROL for fiscal 2010 were $20.2 million. Throughout the year we grew VIVITROL sales, and managed our expenses, so that during the last quarter we narrowed our VIVITROL loss to approximately $2.5 million. We look forward to continuing that progress in fiscal 2011.
Turing to expenses, total operating expenses for the fiscal year were $221.3 million, which included $18.9 million of mostly non-cash charges associated with the relocation of our headquarters from Cambridge to Waltham, Massachusetts, and $15.3 million of share based compensation in severance expense.