PENNSYLVANIA (State or Other Jurisdiction of Incorporation) |
1-14131 (Commission File Number) |
23-2472830 (I.R.S. Employer Identification No.) |
852 Winter Street Waltham, Massachusetts (Address of principal executive offices) |
02451 (Zip Code) |
Exhibit | ||
No. | Description | |
99.1
|
Press release issued by Alkermes, Inc. dated May 18, 2011 announcing financial results for the fiscal year 2011 and financial expectations for the fiscal year 2012. |
ALKERMES, INC. |
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Date: May 18, 2011 | By: | /s/ James M. Frates | ||
James M. Frates | ||||
Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) |
| Total revenues of $186.6 million for fiscal 2011, driven by record manufacturing and royalty revenues from RISPERDAL® CONSTA®. | ||
| Record manufacturing and royalty revenues from RISPERDAL CONSTA of $154.3 million, driven by worldwide sales of RISPERDAL CONSTA of over $1.5 billion by Janssen, Division of Ortho-McNeil-Janssen Pharmaceuticals, Inc. and Janssen-Cilag (Janssen). For the fourth fiscal quarter, worldwide sales by Janssen were approximately $404 million, an increase of 6.8% over the same quarter in 2010. | ||
| Strong financial position, with cash and total investments of $294.7 million as of March 31, 2011, which reflects the redemption of all remaining non-recourse RISPERDAL CONSTA secured 7% Notes during the year, leaving Alkermes debt-free. | ||
| GAAP net loss of $45.5 million and pro forma net loss of $23.5 million for fiscal 2011. |
| Entered into an agreement with Elan Corporation, plc for the merger of Alkermes with Elan Drug Technologies (EDT). The transaction is expected to be immediately accretive to cash earnings and accelerates Alkermes path to building a sustainably profitable biopharmaceutical company focused on central nervous system (CNS) diseases. |
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| BYDUREON recommended for approval in the EU by the Committee for Medicinal Products for Human Use of the European Medicines Agency for the treatment of type 2 diabetes. | ||
| VIVITROL® approval in Russia for the treatment of opioid dependence received by Cilag GmbH International, a subsidiary of Johnson & Johnson. | ||
| Announced positive results from a phase 2 study evaluating exenatide once monthly in patients with type 2 diabetes. | ||
| Announced top-line results from DURATION-6, a head-to-head study designed to compare weekly BYDUREON to daily liraglutide. | ||
| Announced positive preliminary results from a phase 2 study of ALKS 37 for the treatment of opioid-induced constipation. | ||
| Partner Amylin Pharmaceuticals, Inc. (Amylin) commenced a thorough QT (tQT) study for BYDUREON in February 2011 and plans to submit the results of this study to the U.S. Food and Drug Administration (FDA) in the second half of calendar 2011. |
| GAAP net loss of $45.5 million, or a basic and diluted loss per share of $0.48, including $19.8 million in share-based compensation expense and $2.2 million in costs related to the early redemption of the non-recourse RISPERDAL CONSTA secured 7% Notes. For fiscal 2010, GAAP net loss was $39.6 million, or a basic and diluted loss per share of $0.42, including $15.3 million in share-based compensation and severance expense and $18.9 million in charges associated with the relocation of the companys corporate headquarters to Waltham, Massachusetts. | ||
| Pro forma net loss of $23.5 million, or a basic and diluted loss per share of $0.25 for fiscal 2011, compared to a pro forma net loss of $5.4 million, or a basic and diluted loss per share of $0.06 for fiscal 2010. |
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Charges Related to | Share-Based | |||||||||||||||||||
the Relocation of | Compensation and | Costs Related to | Reported GAAP | |||||||||||||||||
Pro Forma | the Companys | Severance | the Redemption of | Diluted | ||||||||||||||||
Diluted Loss | Headquarters | Expense | the 7% Notes | Loss | ||||||||||||||||
FY 2011 |
($0.25 | ) | $ | | ($0.21 | ) | ($0.02 | ) | ($0.48 | ) | ||||||||||
FY 2010 |
($0.06 | ) | ($0.20 | ) | ($0.16 | ) | $ | | ($0.42 | ) |
| Total revenues for fiscal 2011 were $186.6 million, compared to $178.3 million for fiscal 2010. | ||
| Total manufacturing revenues for fiscal 2011 were $118.5 million, which included $116.1 million related to RISPERDAL CONSTA, $2.3 million related to the sale of polymer for BYDUREON and $0.1 million related to VIVITROL for sale in Russia, compared to $112.9 million for fiscal 2010, which included $109.0 million related to RISPERDAL CONSTA, $3.4 million related to the manufacture of polymer for BYDUREON and $0.5 million related to VIVITROL for sale in Russia. | ||
| Royalty revenues for fiscal 2011 were $38.3 million, of which $38.1 million related to RISPERDAL CONSTA, based on net sales of approximately $1.5 billion, compared to $37.0 million for fiscal 2010, of which $36.9 million related to RISPERDAL CONSTA, based on net sales of approximately $1.5 billion. | ||
| Net sales of VIVITROL for fiscal 2011 were $28.9 million, compared to net sales of $20.2 million for fiscal 2010. | ||
| Research and development (R&D) revenue under collaborative arrangements for fiscal 2011 was $0.9 million, compared to $3.1 million for fiscal 2010. | ||
| Net collaborative profit for fiscal 2011 was $0, compared to $5.0 million for fiscal 2010. |
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| Cost of goods manufactured and sold for fiscal 2011 was $52.2 million, which included $41.0 million related to RISPERDAL CONSTA, $8.8 million related to VIVITROL and $2.4 million related to the manufacture of polymer for BYDUREON, compared to $49.4 million for fiscal 2010, of which $40.2 million related to RISPERDAL CONSTA, $6.9 million related to VIVITROL and $2.3 million related to the manufacture of polymer for BYDUREON. | ||
| R&D expenses for fiscal 2011 were $97.2 million, compared to $95.4 million for fiscal 2010. Fiscal 2010 R&D expenses included $18.7 million of charges related to the relocation of the companys corporate headquarters to Waltham, Massachusetts. | ||
| Selling, general and administrative (SG&A) expenses for fiscal 2011 were $82.8 million, compared to $76.5 million for fiscal 2010. | ||
| Share-based compensation expense (included in operating expenses above) for fiscal 2011 was $19.8 million, of which $1.7 million related to cost of goods manufactured, $6.2 million related to R&D expenses and $11.9 million related to SG&A expenses. Share-based compensation expense for fiscal 2010 was $13.9 million, of which $1.5 million related to cost of goods manufactured, $3.5 million related to R&D expenses and $8.9 million related to SG&A expenses. | ||
| Interest income for fiscal 2011 was $2.7 million, compared to $4.7 million for fiscal 2010. Interest expense for fiscal 2011 was $3.3 million, compared to interest expense of $6.0 million for fiscal 2010. |
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| Revenues: The company expects total revenues to range from $205 to $229 million. | ||
| The company expects total manufacturing revenues to range from $121 to $127 million. The expected manufacturing revenues for RISPERDAL CONSTA range from $120 to $125 million and are based on a purchase forecast from Janssen and assume no significant changes in exchange rates. The expected manufacturing revenues from sales of polymer to manufacture BYDUREON range from $1 to $2 million and are based on a purchase forecast from Amylin. Both Janssen and Amylin have the right to change the timing and amount of their purchases. Alkermes revenue estimates are also dependent upon its ability to manufacture sufficient quantities of RISPERDAL CONSTA and polymer for BYDUREON to meet its partners estimates. | ||
| The company expects total royalty revenues to range from $37 to $45 million. The expected royalty revenues from RISPERDAL CONSTA range from $37 to $39 million. The company expects royalty revenues from sales of BYDUREON in the EU of up to $5 million and royalty revenues from sales of VIVITROL in Russia of up to $1 million. Sales of RISPERDAL CONSTA, BYDUREON and VIVITROL in Russia are dependent on the companys partners. These expectations assume no significant changes in exchange rates. |
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| The company expects net product sales from VIVITROL to range from $40 to $50 million. | ||
| The company expects R&D revenues of $7 million, receivable from Amylin upon first commercial sale of BYDUREON in the EU. | ||
| Cost of Goods Manufactured: The company expects total cost of goods manufactured to range from $46 to $57 million. The expected cost of goods manufactured related to RISPERDAL CONSTA ranges from $40 to $45 million. The expected cost of goods manufactured related to VIVITROL ranges from $5 to $10 million. The expected cost of goods manufactured related to polymer for BYDUREON ranges from $1 to $2 million. These cost estimates are based on expected sales by Alkermes in the U.S., projected orders from Janssen and Amylin and the companys historical manufacturing yields. Margins on RISPERDAL CONSTA, VIVITROL and polymer for BYDUREON are dependent on many factors and may fluctuate. Orders from Janssen and Amylin are subject to change at any time. | ||
| R&D Expenses: The company expects R&D expenses to range from $110 to $125 million. This expectation is based on product candidates moving into later-stage development and does not assume any new collaborative arrangements. | ||
| SG&A Expenses: The company expects SG&A expenses to range from $85 to $95 million. These expectations include the companys continuing commercialization operations for VIVITROL. | ||
| Operating Loss: The company expects operating loss to range from $36 to $48 million. | ||
| Net Interest and Income Taxes: The company expects net interest income to range from $0 to $3 million, and does not expect to incur any income taxes in fiscal 2012. | ||
| Net Loss: The company expects net loss to range from $36 to $45 million, or a basic and diluted loss per share of approximately $0.38 to $0.47 per share. The basic loss per share is based on the current basic share count of approximately 96 million shares outstanding. | ||
| Share-based Compensation Expense: The company expects share-based compensation expense, included in the operating expenses above, to be in the range of $20 to $25 million. | ||
| Cash Flow from Operations: The company expects net cash outflow from operations to range from $5 to $15 million in fiscal 2012. |
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Year | Year | |||||||
Ended | Ended | |||||||
Consolidated Statements of Operations | March 31, | March 31, | ||||||
(In thousands, except per share data) | 2011 | 2010 | ||||||
Revenues: |
||||||||
Manufacturing revenues |
$ | 118,521 | $ | 112,938 | ||||
Royalty revenues |
38,319 | 36,979 | ||||||
Product sales, net |
28,920 | 20,245 | ||||||
Research and development revenue under collaborative arrangements |
880 | 3,117 | ||||||
Net collaborative profit |
| 5,002 | ||||||
Total Revenues |
186,640 | 178,281 | ||||||
Expenses: |
||||||||
Cost of goods manufactured and sold |
52,185 | 49,438 | ||||||
Research and development |
97,239 | 95,363 | ||||||
Selling, general and administrative |
82,847 | 76,514 | ||||||
Total Expenses |
232,271 | 221,315 | ||||||
Operating Loss |
(45,631 | ) | (43,034 | ) | ||||
Other Expense, net: |
||||||||
Interest income |
2,728 | 4,667 | ||||||
Interest expense |
(3,298 | ) | (5,974 | ) | ||||
Other expense, net |
(290 | ) | (360 | ) | ||||
Total Other Expense, net |
(860 | ) | (1,667 | ) | ||||
Loss Before Income Taxes |
(46,491 | ) | (44,701 | ) | ||||
Income Tax Benefit |
(951 | ) | (5,075 | ) | ||||
Net Loss |
$ | (45,540 | ) | $ | (39,626 | ) | ||
Loss per Common Share: |
||||||||
Basic and Diluted |
$ | (0.48 | ) | $ | (0.42 | ) | ||
Weighted Average Number of Common Shares Outstanding (GAAP and Pro Forma): |
||||||||
Basic and Diluted |
95,610 | 94,839 | ||||||
Pro Forma Reconciliation: |
||||||||
Net Loss GAAP |
$ | (45,540 | ) | $ | (39,626 | ) | ||
Share-based compensation and severance expense |
19,832 | 15,327 | ||||||
Costs related to the redemption of the non-recourse 7% Notes |
2,168 | | ||||||
Costs incurred related to the relocation of the companys corporate headquarters |
| 18,949 | ||||||
Net Loss Pro Forma |
$ | (23,540 | ) | $ | (5,350 | ) | ||
Pro Forma Loss per Common Share: |
||||||||
Basic and Diluted |
$ | (0.25 | ) | $ | (0.06 | ) | ||
Consolidated Balance Sheets | March 31, | March 31, | ||||||
(In thousands) | 2011 | 2010 | ||||||
Cash, cash equivalents and total investments |
$ | 294,730 | $ | 350,193 | ||||
Receivables |
22,969 | 25,316 | ||||||
Inventory |
20,425 | 20,653 | ||||||
Prepaid expenses and other current assets |
8,244 | 10,936 | ||||||
Property, plant and equipment, net |
95,020 | 96,905 | ||||||
Other assets |
11,060 | 11,597 | ||||||
Total Assets |
$ | 452,448 | $ | 515,600 | ||||
Non-recourse RISPERDAL CONSTA secured 7% notes -
current |
$ | | $ | 51,043 | ||||
Other current liabilities |
48,057 | 40,101 | ||||||
Deferred revenue long-term |
4,837 | 5,105 | ||||||
Other long-term liabilities |
7,536 | 6,735 | ||||||
Total shareholders equity |
392,018 | 412,616 | ||||||
Total Liabilities and Shareholders Equity |
$ | 452,448 | $ | 515,600 | ||||
Three Months Ended | Year Ended | |||||||||||||||||||
June 30, | September 30, | December 31, | March 31, | March 31, | ||||||||||||||||
2010 | 2010 | 2010 | 2011 | 2011 | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||
Revenues: |
||||||||||||||||||||
Manufacturing revenues |
$ | 26,891 | $ | 33,163 | $ | 26,155 | $ | 32,312 | $ | 118,521 | ||||||||||
Royalty revenues |
8,917 | 9,460 | 9,777 | 10,165 | 38,319 | |||||||||||||||
Product sales, net |
6,204 | 6,469 | 7,729 | 8,518 | 28,920 | |||||||||||||||
Research and development revenue under
collaborative arrangements |
268 | 155 | 314 | 143 | 880 | |||||||||||||||
Total Revenues |
42,280 | 49,247 | 43,975 | 51,138 | 186,640 | |||||||||||||||
Expenses: |
||||||||||||||||||||
Cost of goods manufactured and sold |
12,665 | 13,911 | 12,860 | 12,749 | 52,185 | |||||||||||||||
Research and development |
22,977 | 23,932 | 22,503 | 27,827 | 97,239 | |||||||||||||||
Selling, general and administrative |
19,726 | 18,436 | 20,521 | 24,164 | 82,847 | |||||||||||||||
Total Expenses |
55,368 | 56,279 | 55,884 | 64,740 | 232,271 | |||||||||||||||
Operating Loss |
(13,088 | ) | (7,032 | ) | (11,909 | ) | (13,602 | ) | (45,631 | ) | ||||||||||
Total Other Expense (Income), net |
(379 | ) | (1,577 | ) | 567 | 529 | (860 | ) | ||||||||||||
Loss Before Income Taxes |
(13,467 | ) | (8,609 | ) | (11,342 | ) | (13,073 | ) | (46,491 | ) | ||||||||||
Income Tax (Benefit) Provision |
(58 | ) | (943 | ) | 41 | 9 | (951 | ) | ||||||||||||
Net Loss |
$ | (13,409 | ) | $ | (7,666 | ) | $ | (11,383 | ) | $ | (13,082 | ) | $ | (45,540 | ) | |||||
Loss Per Common Share: |
||||||||||||||||||||
Basic and diluted |
$ | (0.14 | ) | $ | (0.08 | ) | $ | (0.12 | ) | $ | (0.14 | ) | $ | (0.48 | ) | |||||
Weighted Average Number of Common Shares Outstanding: |
||||||||||||||||||||
Basic and diluted |
95,326 | 95,511 | 95,667 | 95,939 | 95,610 | |||||||||||||||