Personal Finance

Here's Why Alkermes Spiked Today

A person in a suit giving thumbs up as money falls in the background.

What happened

In response to reporting fourth-quarter results and sharing guidance for 2018, shares of Alkermes (NASDAQ: ALKS) , a commercial-stage biopharmaceutical company focused on diseases of the central nervous system, rose as much as 10% on Wednesday. Shares settled down in afternoon trading but were still up 7% as of 2:30 p.m. EST.

So what

Here's a review of the headline numbers from the quarter:

  • Revenue jumped 29% to $275 million thanks to broad strength in product sales and the company's recently announced deal with Biogen (NASDAQ: BIIB) . That sailed past the $253 million in revenue that Wall Street had projected.
  • Non-GAAP net income more than doubled to $50.3 million, or $0.33 per share. That also compared favorably to the $0.23 that analysts had modeled.
A person in a suit giving thumbs up as money falls in the background.

Image source: Getty Images.

Looking beyond the financials, Alkermes also provided investors with a review of its recent business developments:

  • ALKS 5461, a hopeful treatment for depression that has already achieved Fast Track status, was successfully submitted to the FDA for review.
  • Alkermes' agreement with Biogen could allow the company to earn up to $200 million in milestone payments plus royalties on any product sales should everything go according to plan.
  • Aripiprazole Lauroxil NanoCrystal Dispersion, which is a compound that helps patients get started with Alkermes' schizophrenia drug Aristada, has been submitted for regulatory review.

Turning to 2018, here's the guidance that management is offering investors:

  • Revenue is expected to land between $975 million and $1.025 billion. The midpoint of this range is slightly ahead of what Wall Street was expecting.
  • Non-GAAP net loss is expected to be between $5 million to $35 million, or $0.03 to $0.23 per share. This is behind the $0.44 in EPS that analysts were projecting.

Given the strong fourth-quarter results, it isn't hard to figure out why shareholders are having a good day.

Now what

Alkermes has set itself up to have an action packed 2018. All of the company's products look poised for continued growth and go/no-go decisions are expected on both ALKS 5461 and Aripiprazole Lauroxil NanoCrystal Dispersion. Meanwhile, Biogen looks poised to submit BIIB098 for regulatory review -- which should trigger a $50 million milestone payment -- and investors should also get a look at phase 2 results for a schizophrenia product candidate called ALKS 3831.

Investors have reason to believe CFO James Frates when he says that 2018 should be a "transformative year" for Alkermes. That's why Alkermes stock is capable of still moving higher, even after accounting for Wednesday's big jump.

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Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alkermes. The Motley Fool recommends Biogen. The Motley Fool has a disclosure policy .

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


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

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