Alkermes (ALKS) Reports Wider-Than-Expected Loss In Q1

Alkermes plc ( (NASDAQ:ALKS) ) reported adjusted loss of 9 cents per share in the first quarter of 2018, wider than the Zacks Consensus Estimate of a loss of 8 cents. The bottom line was, however, narrower than the adjusted loss of 18 cents recorded in the year-ago quarter.

The company’s revenues of $225.2 million in the quarter were up 17% year over year. The top line beat the Zacks Consensus Estimate of $222 million.

The results were driven by strong growth of the company’s proprietary products, Vivitrol and Aristada.

So far this year, Alkermes’ shares have lost 16.2%, compared with the industry’s decline of 8%.

Revenues Rise

Manufacturing and royalty revenues from Risperdal Consta, Invega Sustenna/ Xeplion and Invega Trinza/Trevicta were $68.8 million, up 14.7% year over year. The same from Ampyra/Fampyra were down 3.1% year over year to $28.3 million.

Vivitrol sales improved 7.2% year over year to $62.7 million.

Aristada sales came in at $29.2 million up 62.2% year over year.

Costs Rise

Research and Development (R&D) expenses were $108.3 million, up 3.4% year over year.

Selling, General and Administrative (SG&A) expenses were $118.1 million, up 15.7% year over year.

2018 Outlook

The company expects total revenues in the range of $975-$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 Zacks Consensus Estimate is $3.92 billion which is above the guidance range provided by the company.

The company expects R&D expenses to range $415-$445 million. The company now expects SG&A expenses to range from $515 million to $545 million, reduced from a previous expectation of $555-$585 million. This reduction is driven by the shift into 2019 of certain launch-related expenditures including the hiring of the ALKS 5461 sales force, and share-based compensation expense related to certain company-wide performance-based restricted stock unit awards, which vest upon FDA approval of ALKS 5461.

For 2018, the company expects loss per share to be in the range of 6 cents per share to earnings in the range of 12 cents per share compared with the previous expectation of loss per share in the range of 3-23 cents. The Zacks Consensus Estimate is $6.90 which is within the guidance range provided by the company.

Pipeline Update

The FDA accepted the company’snew drug application (NDA) for ALKS 5461 for adjunctive treatment of major depressive disorder and set an action date of Jan 31, 2019.

The company completed enrollment for ENLIGHTEN-2, a six-month weight study for ALKS 3831 compared to olanzapine in patients with stable schizophrenia. Top-line results are expected in the fourth quarter of 2018.

In November 2017, Alkermes and Biogen (NASDAQ:BIIB) announced a global license and collaboration agreement to develop and commercialize Alkermes’ phase III multiple sclerosis candidate, BIIB098 (ALKS8700). For BIIB098, preparation of the regulatory submission has begun and the company remains on track to submit the NDA toward year-end 2018.

Zacks Rank & Other Stocks to Consider

Alkermes is a Zacks Rank #2 (Buy) stock.

Other top-ranked stocks from the same space are Ligand Pharmaceuticals (NASDAQ:LGND) and Protagonist Therapeutics (NASDAQ:PTGX) . Both of themsport a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

Ligand’s earnings per share estimates have moved up $4.15 to $4.43 for 2018 over the last 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 24.88%. The company’s shares have rallied 15.8% year to date.

Protagonist’s loss estimates narrowed from $1.68 to 66 cents for 2018 and from $2.43 to $1.26 for 2019, over the last 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 24.95%.

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