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Alkermes Inc. Reports Operating Results (10-Q)

February 03, 2011 | About:
10qk

10qk

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Alkermes Inc. (ALKS) filed Quarterly Report for the period ended 2010-12-31.

Alkermes Inc has a market cap of $1.23 billion; its shares were traded at around $12.96 with and P/S ratio of 6.9. Hedge Fund Gurus that owns ALKS: Steven Cohen of SAC Capital Advisors, Bruce Kovner of Caxton Associates, Jim Simons of Renaissance Technologies LLC. Mutual Fund and Other Gurus that owns ALKS: Jeff Auxier of Auxier Focus Fund.

Highlight of Business Operations:

Net loss for the three months ended December 31, 2010 was $11.4 million, or $0.12 per common share, basic and diluted, as compared to a net loss of $6.8 million, or $0.07 per common share, basic and diluted, for the three months ended December 31, 2009. Net loss for the nine months ended December 31, 2010 was $32.5 million, or $0.34 per common share, basic and diluted, as compared to a net loss of $25.7 million, or $0.27 per common share, basic and diluted, for the nine months ended December 31, 2009. Our most significant commercialized products are RISPERDAL CONSTA, which we manufacture for the treatment of schizophrenia and bipolar I disorder, and VIVITROL® (naltrexone for extended-release injectable suspension), which we developed, manufacture and commercialize for alcohol dependence and for the prevention of relapse to opioid dependence, following opioid detoxification. RISPERDAL CONSTA and VIVITROL comprised 80% and 18%, respectively, of our consolidated revenues for the three months ended December 31, 2010 and 83% and 15%, respectively, of our consolidated revenues for the nine months ended December 31, 2010.

Substantially all of our royalty revenues for the three and nine months ended December 31, 2010 and 2009 were related to sales of RISPERDAL CONSTA. Under our license agreements with Janssen, we record royalty revenues equal to 2.5% of Janssens net sales of RISPERDAL CONSTA in the period that the product is sold by Janssen. RISPERDAL CONSTA royalty revenues for the three and nine months ended December 31, 2010 were based on RISPERDAL CONSTA sales of $387.8 million and $1,121.3 million, respectively. RISPERDAL CONSTA royalty revenues for the three and nine months ended December 31, 2009 were based on RISPERDAL CONSTA sales of $398.7 million and $1,099.1 million, respectively.

Net collaborative profit for the nine months ended December 31, 2009 of $5.0 million consisted of revenue earned as a result of the $11.0 million payment we received from Cephalon to fund their share of estimated VIVITROL losses during the one-year period following the termination of the VIVITROL collaboration in December 2008. We initially recorded the $11.0 million as deferred revenue and recognized it as revenue through the application of a proportional performance model based on VIVITROL losses. The $11.0 million payment was fully recognized as revenue during the six months ended September 30, 2009.

The increase in cost of goods manufactured for RISPERDAL CONSTA in the three and nine months ended December 31, 2010, as compared to the three and nine months ended December 31, 2009, was primarily due to a 28% and 11% increase in the number of units shipped to Janssen, respectively, partially offset by a 12% and 7% decrease in the unit cost of RISPERDAL CONSTA, respectively. The decrease in the unit cost of RISPERDAL CONSTA in the three and nine months ended December 31, 2010, as compared to the three and nine months ended December 31, 2009, was partially due to a decrease in costs incurred for scrap of $0.9 million and $1.9 million, respectively.

The increase in cost of goods manufactured and sold for VIVITROL in the three and nine months ended December 31, 2010, as compared to the three and nine months ended December 31, 2009, was primarily due to a 55% and 12% increase in the number of units sold out of the distribution channel, respectively. Also included in cost of goods manufactured and sold for VIVITROL in the three and nine months ended December 31, 2010 are idle capacity charges of $0.4 million and $1.8 million, respec

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