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Alkermes Inc. Reports Operating Results (10-Q)

November 05, 2009 | About:
10qk

10qk

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Alkermes Inc. (ALKS) filed Quarterly Report for the period ended 2009-09-30.

Alkermes Inc. is a biotechnology company that develops innovative medicines designed to yield better therapeutic outcomes and improve the lives of patients with serious disease. Alkermes currently has two commercial products: RISPERDAL CONSTA the first and only long-acting atypical antipsychotic medication approved for use in schizophrenia and marketed worldwide by Janssen-Cilag a wholly owned division of Johnson & Johnson; and VIVITROL the first and only once-monthly injectable medication approved for the treatment of alcohol dependence and marketed in the U.S. primarily by Cephalon Inc. Alkermes' pipeline includes extended-release injectable pulmonary and oral products for the treatment of prevalent chronic diseases such as central nervous system disorders addiction and diabetes. Alkermes Inc. has a market cap of $739.1 million; its shares were traded at around $7.83 with a P/E ratio of 8.3 and P/S ratio of 2.2.

Highlight of Business Operations:

Net loss for the three months ended September 30, 2009 was $8.7 million, or $0.09 per common share basic and diluted, as compared to net income of $1.7 million, or $0.02 per common share basic and diluted, for the three months ended September 30, 2008. Net loss for the six months ended September 30, 2009 was $18.9 million, or $0.20 per common share basic and diluted, as compared to net income of $31.4 million, or $0.33 per common share basic and $0.32 per common share diluted, for the six months ended September 30, 2008. Net loss for the three and six months ended September 30, 2009 includes $4.1 million and $12.3 million, respectively, in charges associated with the planned relocation of our corporate headquarters from Cambridge, Massachusetts to Waltham, Massachusetts.

We record manufacturing revenues under our arrangement with Cilag at an agreed upon price when product is shipped to them. VIVITROL manufacturing revenues for the three and six months ended September 30, 2009 consisted entirely of product shipments to Cilag for resale in Russia. VIVITROL manufacturing revenues for the three and six months ended September 30, 2008 consisted of $1.9 million and $4.6 million, respectively, of billings to Cephalon, Inc. (Cephalon) under the collaborative arrangement in existence at the time, and $0.4 million of billings to Cilag for shipments of VIVITROL to support the commercialization of VIVITROL in Russia. Effective December 1, 2008 (the Termination Date), we ended our collaboration with Cephalon and assumed full responsibility for the marketing and sale of VIVITROL in the U.S. As such, we expect that VIVITROL manufacturing revenues in fiscal year 2010 and beyond will consist of product shipments to Cilag for resale in Russia.

Substantially all of our royalty revenues for the three and six months ended September 30, 2009 and 2008 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 six months ended September 30, 2009 were based on RISPERDAL CONSTA sales of $352.6 million and $700.3 million, respectively. Royalty revenues for the three and six months ended September 30, 2008 were based on RISPERDAL CONSTA sales of $337.5 million and $680.7 million, respectively.

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