Alkermes (ALKS) Beats Q4 Earnings, Revenue Estimates

Alkermes plc (NASDAQ:ALKS) reported adjusted earnings of 31 cents per share in the fourth quarter of 2017, beating the Zacks Consensus Estimate of 21 cents. The bottom line also exceeded adjusted earnings of 15 cents recorded in the year-ago quarter.

The company’s revenues of $275.4 million in the quarter were up 29% year over year. The top line also beat the Zacks Consensus Estimate of $247 million.

The results were driven by strong growth of the company’s proprietary products, Vivitrol and Aristada, higher manufacturing and royalty revenues, and upfront payment from Biogen (NASDAQ:BIIB) related to the collaboration for BIIB098.

Shares of the company rose around 9% post the earnings release based on strong fourth quarter results. So far this year, Alkermes’ share price has improved 4.2%, as against the industry’s decline of 3.4%.

Revenues Rise

Manufacturing and royalty revenues from Risperdal Consta, Invega Sustenna/ Xeplion and Invega Trinza/Trevicta were $78.2 million, up 5.7% year over year. The same from Ampyra/Fampyra were up 17.9% year over year to $38.1 million.

Vivitrol sales improved 22% year over year to $75.6 million.

Aristada sales came in at $28.3 million up 63.6% year over year.

Costs Rise

Research and Development (R&D) expenses were $104.5 million, up 16.6% year over year

Selling, General and Administrative (SG&A) expenses were $110.9 million, up 14.2% year over year.

2017 Results

The company generated revenues of $903.4 million in 2017, an increase of 21%, year over year.

Adjusted earnings were 17 cents per share, as against a loss of 7 cents in 2016.

2018 Outlook

The company expects total revenues in the range of $975 million-$1.025 billion, driven by continuous growth of Vivitrol and Aristada. Vivitrol sales are expected in the range of $300-$330 million while Aristada sales are anticipated to range $140-$160 million.

The company expects R&D expenses to range $415-$445 million. SG&A expenses are forecast in the band of $555 million to $585 million. This increase can be attributed to the planned investment in the expansion of its commercial organization in preparation for the expected launch of ALKS 5461 for the treatment of major depressive disorder.

For 2018, the company expected loss per share in the range of 3-23 cents.

Pipeline Update

In January 2018, the company submitted a new drug application (NDA) to the FDA for ALKS 5461 for adjunctive treatment of major depressive disorder.

In November 2017, Alkermes and Biogen announced a global license and collaboration agreement to develop and commercialize Alkermes’ phase III multiple sclerosis ("MS") candidate, BIIB098 (ALKS8700). Per the deal, Biogen was granted worldwide commercialization rights to Alkermes’ ALKS 8700 for an upfront payment of $28 million. In return, Biogen will pay Alkermes royalties at a mid-teens percentage rate on global sales of ALKS 8700.

The deal will be beneficial for both companies as it will lower costs and bring in a strong partner for Alkermes. Alkermes will also receive milestone payment of up to $200 million for various clinical and regulatory achievements.

In November 2017, the NDA for Aripiprazole Lauroxil NanoCrystal Dispersion (“ALNCD”), was accepted for filing by the FDA. ALNCD is a novel, investigational product designed for initiation onto Aristada extended-release injectable suspension for the treatment of schizophrenia, The FDA issued a target action date for the ALNCD NDA of June 30, 2018 under the Prescription Drug User Fee Act.

Zacks Rank & Stocks to Consider

Alkermes is a Zacks Rank #3 (Hold) stock.

Some better-ranked stocks from the health care space are XOMA Corp (NASDAQ:XOMA) and Exelixis (NASDAQ:EXEL) .Both of them carry a Zacks Rank #2 (Buy), each. You can see the complete list of today’s Zacks #1 Rank stocks here.

XOMA’s loss per share estimates have narrowed from 99 cents to 42 cents for 2018 in the last 60 days. The company pulled off a positive earnings surprise in one of the last four quarters, with an average beat of 47.92%. Share price of the company skyrocketed 393% over a year.

Exelixis’ earnings per share estimates have moved up from 72 cents to 77 cents for 2018 in the last 60 days. The company delivered positive earnings surprise in the last four quarters, with an average beat of 572.92%. Share price of the company surged 33.7% over a year.

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