Alkermes plc Reports Third Quarter Fiscal 2013 Financial Results

  Alkermes plc Reports Third Quarter Fiscal 2013 Financial Results

 — Company Improves Guidance for Fiscal 2013, Driven by Stronger Revenues and
                               Lower Expenses —

  — Third Quarter Non-GAAP Diluted EPS Grew to $0.34 from $0.10 for the Same
                        Period in Prior Fiscal Year —

Business Wire

DUBLIN -- January 31, 2013

Alkermes plc (NASDAQ: ALKS) today reported financial results for its third
quarter of fiscal 2013, which ended Dec. 31, 2012, and improved financial
expectations for its fiscal year 2013.

“With results now spanning an entire year, the power of Alkermes plc is
becoming evident. Our strong financial performance was driven by our five key
commercial products, which grew 33% year-over-year,” commented James Frates,
Chief Financial Officer of Alkermes. “Today, we are again improving our
financial expectations for fiscal 2013, based on our robust operational
performance across the business. We now expect Alkermes to generate between
$135 million and $155 million in non-GAAP net income this fiscal year.”

Third Quarter Fiscal 2013 Highlights

  *Total revenues for the third quarter of fiscal 2013 increased 8.2% to
    $135.9 million, compared to the same period in fiscal 2012, which was
    attributable primarily to growth from the company’s key commercial
    products.
  *Based on accounting principles generally accepted in the U.S. (GAAP),
    Alkermes reported net income of $16.3 million, or a basic and diluted
    earnings per share (EPS) of $0.12, for the third quarter of fiscal 2013.
    This compared to a GAAP net loss of $14.8 million, or a basic and diluted
    loss per share of $0.11, for the same period in fiscal 2012.
  *The company reported non-GAAP^1 net income of $46.5 million, or a non-GAAP
    diluted EPS of $0.34, for the third quarter of fiscal 2013. This compared
    to non-GAAP net income of $12.8 million, or a non-GAAP diluted EPS of
    $0.10, for the same period in fiscal 2012.

“This quarter demonstrates the strength of Alkermes’ business model, which is
characterized by two robust portfolios – our commercial products and our
development pipeline. The quarterly financial results underscore our ability
to hit financial goals while investing in a promising pipeline,” commented
Richard Pops, Chief Executive Officer of Alkermes. “As we move into 2013, we
are excited by how our late-stage pipeline is taking shape, with interesting
new medicines that have blockbuster potential and many important data readouts
this year.”

Third Quarter Fiscal 2013 Financial Results

Revenues

  *Manufacturing and royalty revenues from the company’s long-acting atypical
    antipsychotic franchise, RISPERDAL^® CONSTA^® and INVEGA^®
    SUSTENNA^®/XEPLION^®, were $52.5 million for the third quarter of fiscal
    2013, compared to $47.6 million for the same period in fiscal 2012.
    Worldwide end-market sales of RISPERDAL CONSTA and INVEGA SUSTENNA/XEPLION
    ^ for the third quarter of fiscal 2013 were approximately $586 million and
    grew approximately 13% compared to the same period in fiscal 2012.
  *Manufacturing and royalty revenues from AMPYRA^®/FAMPYRA^®2 were $18.4
    million for the third quarter of fiscal 2013, compared to $10.6 million
    for the same period in fiscal 2012. Unaudited end-market sales of AMPYRA
    by Acorda Therapeutics, Inc. in the U.S. for the third quarter of fiscal
    2013 were approximately $73 million and grew approximately 28% compared to
    the same period in fiscal 2012. End-market sales of FAMPYRA by Biogen Idec
    for the third quarter of fiscal 2013 were approximately $10.5 million and
    grew approximately 1% compared to the same period in fiscal 2012.
  *Net sales of VIVITROL^® were $15.9 million for the third quarter of fiscal
    2013, compared to $10.6 million for the same period in fiscal 2012,
    representing an increase of approximately 50%.
  *Royalty revenue from BYDUREON^® was $5.3 million for the third ^ quarter
    of fiscal 2013, based on estimated end-market net sales of approximately
    $65 million. This compared to royalty revenue of $0.3 million for the same
    period in fiscal 2012.
  *Additionally, third quarter fiscal 2013 results included RITALIN
    LA^®/FOCALIN XR^® revenues of $9.8 million and TRICOR^® 145 revenues of
    $6.8 million. This compared to RITALIN LA/FOCALIN XR ^ revenues of $11.6
    million and TRICOR 145 revenues of $15.7 million for the same period in
    fiscal 2012.

Costs and Expenses

  *Operating expenses for the third quarter of fiscal 2013 were $110.6
    million, compared to operating expenses of $130.6 million for the same
    period in fiscal 2012. This reduction was due primarily to the timing of
    clinical trial expenses and the inclusion of certain merger-related
    expenses in fiscal 2012.
  *Net interest expense for the third quarter of fiscal 2013 was $4.5
    million. This compared to net interest expense of $10.1 million for the
    same period in fiscal 2012. This reduction was due primarily to the
    successful refinancing of Alkermes’ senior secured bank debt in September
    2012.

Balance Sheet

At Dec. 31, 2012, Alkermes recorded cash and total investments of $239.3
million, compared to $208.2 million at Sept. 30, 2012, and $246.1 million at
March 31, 2012.

Financial Expectations for Fiscal 2013

Alkermes is improving its financial expectations for fiscal 2013, reflecting
increased net sales expectations for VIVITROL and decreased research and
development (R&D) expense expectations. These factors are expected to increase
non-GAAP net income by $15 million to a range of $135 million to $155 million.
The following outlines Alkermes’ financial expectations for the fiscal year
ending March 31, 2013.

  *Revenues: Alkermes now expects total revenues to range from $520 million
    to $545 million, up from a range of $510 million to $540 million. The
    company now expects VIVITROL net sales to range from $55 million to $60
    million, up from a range of $45 million to $55 million. The company
    continues to expect milestone revenues, unrelated to key clinical
    development candidates, to range from $20 million to $30 million.
  *Cost of Goods Manufactured: The company continues to expect cost of goods
    manufactured to range from $160 million to $170 million.
  *R&D Expenses: The company now  expects  R&D expenses to range from $140
    million to $150 million, down from a range of $150 million to $160
    million.
  *Selling, General and Administrative (SG&A) Expenses: The company continues
    to expect SG&A expenses to range from $120 million to $130 million.
  *Amortization of Intangible Assets: The company continues to expect
    amortization of intangibles to range from $40 million to $45 million.
  *Net Interest Expense: The company continues to expect net interest expense
    to range from $35 million to $40 million.
  *Net Income Tax Expense: The company continues to expect net income tax
    expense to range from $5 million to $10 million.
  *Share-Based Compensation Expense: The company continues to expect
    share-based compensation expense, included in the operating expenses
    above, to range from $35 million to $40 million.
  *GAAP Net Income: The company now expects GAAP net income to range from
    break-even to positive $15 million, or a basic and diluted EPS of
    approximately $0.00 to $0.11, based on weighted average basic and diluted
    share counts of approximately 132 million and 137 million shares
    outstanding, respectively. This compares to previous expectations of a
    GAAP net loss in the range of break-even to $15 million, or a basic and
    diluted loss per share of approximately $0.00 to $0.11.
  *Capital Expenditures: The company now expects capital expenditures to be
    approximately $20 million, down from approximately $25 million.
  *Non-GAAP Net Income: The company now expects non-GAAP net income to range
    from $135 million to $155 million, and non-GAAP diluted EPS to range from
    $0.99 to $1.13. This compares to previous expectations of non-GAAP net
    income in the range of $120 million to $140 million and non-GAAP diluted
    EPS in the range of $0.88 to $1.02.
  *Free Cash Flow: The company now expects free cash flow to range from $115
    million to $135 million, up from a range of $95 million to $115 million.

Conference Call

Alkermes will host a conference call at 8:30 a.m. EST (1:30 p.m. GMT) on
Thursday, Jan. 31, 2013, to discuss these financial results and provide an
update on the company. The conference call will be webcast on the investor
relations section of Alkermes’ website at www.alkermes.com or may be accessed
by dialing +1 888 424 8151 for U.S. callers and +1 847 585 4422 for
international callers. The conference call ID number is 6037988. In addition,
a replay of the conference call will be available from 11:30 a.m. EST (4:30
p.m. GMT) on Thursday, Jan. 31, 2013, through 5:00 p.m. EST (10:00 p.m. GMT)
on Thursday, Feb. 7, 2013, and may be accessed by visiting Alkermes’ website
or by dialing +1 888 843 7419 for U.S. callers and +1 630 652 3042 for
international callers. The replay access code is 6037988.

About Alkermes plc

Alkermes plc is a fully integrated, global biopharmaceutical company that
applies its scientific expertise and proprietary technologies to develop
innovative medicines that improve patient outcomes. The company has a
diversified portfolio of more than 20 commercial drug products and a
substantial clinical pipeline of product candidates that address central
nervous system (CNS) disorders such as addiction, schizophrenia and
depression. Headquartered in Dublin, Ireland, Alkermes plc has an R&D center
in Waltham, Massachusetts; a research and manufacturing facility in Athlone,
Ireland; and manufacturing facilities in Gainesville, Georgia and Wilmington,
Ohio. For more information, please visit Alkermes’ website at
www.alkermes.com.

Note Regarding Forward-Looking Statements

Certain statements set forth above may constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995,
including, but not limited to, statements concerning future financial and
operating performance, business plans or prospects; the likelihood of
continued revenue growth from the company’s commercial products; the
therapeutic and commercial value of the company’s products; and our
expectations concerning the timing and results of our clinical development
activities. These statements are neither promises nor guarantees and are
subject to a variety of risks and uncertainties, many of which are beyond the
company’s control, which could cause actual results to differ materially from
those contemplated in these forward-looking statements.

These risks and uncertainties include, among others: whether the company, and
its partners, are able to continue to successfully commercialize and develop
its products; reimbursement for the company’s products may change; the
possibility of adverse decisions by the U.S. Food and Drug Administration
(FDA) or regulatory authorities outside the U.S. regarding the company’s
products; the company’s products may prove difficult to manufacture, be
precluded from commercialization by the proprietary rights of third parties,
or have unintended side effects, adverse reactions or incidents of misuse;
whether clinical development activities will be completed on time or at all
and whether the results of such activities will be predictive of real-world
results or of results in subsequent clinical trials; and those risks described
in the company’s Annual Report on Form 10-K for the year ended March 31, 2012,
and in other filings made by the company with the Securities and Exchange
Commission (“SEC”) and which are available at the SEC’s website at
www.sec.gov. Existing and prospective investors are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date they are made. The information contained in this press release is
provided by the company as of the date hereof and, except as required by law,
the company disclaims any intention or responsibility for updating any
forward-looking information contained in this press release.

VIVITROL^® is a registered trademark of Alkermes, Inc.; RISPERDAL^® CONSTA^®
and INVEGA^® SUSTENNA^® are registered trademarks of Janssen Pharmaceuticals,
Inc.; XEPLION^® is a registered trademark of Johnson & Johnson Corporation;
AMPYRA^® and FAMPYRA^® are registered trademarks of Acorda Therapeutics, Inc.;
BYDUREON^® is a registered trademark of Amylin Pharmaceuticals, LLC; TRICOR^®
is a registered trademark of Fournier Industrie et Sante Corporation; and
RITALIN LA^® and FOCALIN XR^® are registered trademarks of Novartis AG
Corporation.

^1As a complement to GAAP results, the company is providing non-GAAP net
income (loss) and non-GAAP diluted earnings (loss) per share, which the
company believes better indicate underlying trends in ongoing operations and
cash flows. Non-GAAP net income (loss) adjusts for one-time and non-cash
charges by excluding from GAAP results: share-based compensation;
amortization; depreciation; non-cash net interest expense; non-cash tax
expense; deferred revenue; and certain other one-time items.

^2AMPYRA^® (dalfampridine) Extended Release Tablets, 10 mg is developed and
marketed in the U.S. by Acorda Therapeutics, Inc. and outside the U.S. by
Biogen Idec, under a licensing agreement with Acorda Therapeutics, as
FAMPYRA^® (prolonged-release fampridine tablets).

                               (tables follow)

Alkermes plc and Subsidiaries
Selected Financial Information (Unaudited)
                                                             
                                                                  
                                                 Three Months     Three Months
                                                 Ended            Ended
Condensed Consolidated Statements of             December 31,     December 31,
Operations - GAAP
(In thousands, except per share data)          2012           2011
Revenues:
Manufacturing and royalty revenues               $ 118,274        $ 112,780
Product sales, net                               15,917           10,597
Research and development revenue               1,718         2,266      
Total Revenues                                 135,909       125,643    
Expenses:
Cost of goods manufactured and sold              38,914           42,752
Research and development                         31,319           40,493
Selling, general and administrative              29,867           35,469
Amortization of acquired intangible assets     10,549        11,896     
Total Expenses                                 110,649       130,610    
Operating Income (Loss)                        25,260        (4,967     )
Other (Expense), net:
Interest income                                  155              350
Interest expense                                 (4,703     )     (10,458    )
Other income, net                              (49        )   345        
Total Other (Expense), net                     (4,597     )   (9,763     )
Income (Loss) Before Income Taxes              20,663        (14,730    )
Income Tax Provision                           4,405         98         
Net Income (Loss) — GAAP                       $ 16,258      $ (14,828  )
                                                                  
(Loss) Earnings Per Share:
GAAP earnings (loss) per share — basic           $ 0.12          $ (0.11    )
GAAP earnings (loss) per share — diluted         $ 0.12          $ (0.11    )
Non-GAAP earnings per share — basic              $ 0.35          $ 0.10     
Non-GAAP earnings per share — diluted            $ 0.34          $ 0.10     
                                                                  
Weighted Average Number of Ordinary Shares
Outstanding:
Basic — GAAP                                     132,097         129,670    
Diluted — GAAP                                   137,497         129,670    
Basic — Non-GAAP                                 132,097         129,670    
Diluted — Non-GAAP                               137,497         133,617    
                                                                  
An itemized reconciliation between net
income (loss) on a GAAP basis and non-GAAP
net income is as follows:
Net Income (Loss) — GAAP                         $ 16,258         $ (14,828  )
Adjustments:
Non-cash net interest expense                    496              2,853
Non-cash taxes                                   3,373            (9,957     )
Depreciation expense                             8,052            8,981
Amortization expense                             10,549           11,896
Share-based compensation                         8,226            9,031
Deferred revenue                                 (412       )     415
Merger-related costs                             -               4,447      
Non-GAAP Net Income                              $ 46,542        $ 12,838   
                                                                  
                                                                  
                                                 Nine Months      Nine Months
                                                 Ended            Ended
Condensed Consolidated Statements of             December 31,     December 31,
Operations - GAAP
(In thousands, except per share data)          2012           2011
Revenues:
Manufacturing and royalty revenues               $ 363,981        $ 215,759
Product sales, net                               43,481           30,170
Research and development revenue               4,664         13,575     
Total Revenues                                 412,126       259,504    
Expenses:
Cost of goods manufactured and sold              122,475          76,501
Research and development                         104,213          96,703
Selling, general and administrative              91,079           103,200
Amortization of acquired intangible assets     31,530        13,713     
Total Expenses                                 349,297       290,117    
Operating Income (Loss)                        62,829        (30,613    )
Other (Expense), net:
Interest income                                  670              1,235
Interest expense                                 (37,521    )     (18,019    )
Other income, net                              1,597         770        
Total Other (Expense), net                     (35,254    )   (16,014    )
Income (Loss) Before Income Taxes              27,575        (46,627    )
Income Tax Provision                           5,591         3,694      
Net Income (Loss) — GAAP                       $ 21,984      $ (50,321  )
                                                                  
Earnings (Loss) Per Share:
GAAP earnings (loss) per share — basic           $ 0.17          $ (0.46    )
GAAP earnings (loss) per share — diluted         $ 0.16          $ (0.46    )
Non-GAAP earnings per share — basic              $ 0.94          $ 0.21     
Non-GAAP earnings per share — diluted            $ 0.90          $ 0.21     
                                                                  
Weighted Average Number of Ordinary Shares
Outstanding:
Basic — GAAP                                     131,202         109,645    
Diluted — GAAP                                   136,216         109,645    
Basic — Non-GAAP                                 131,202         109,645    
Diluted — Non-GAAP                               136,216         113,727    
                                                                  
An itemized reconciliation between net
income (loss) on a GAAP basis and non-GAAP
net income is as follows:
Net Income (Loss) — GAAP                         $ 21,984         $ (50,321  )
Adjustments:
Non-cash net interest expense                    4,116            4,537
Non-cash taxes                                   2,382            (6,376     )
Depreciation expense                             23,900           13,538
Amortization expense                             31,530           13,713
Share-based compensation                         26,835           21,743
Deferred revenue                                 1,352            (59        )
Loss on debt refinancing                         12,129           -
Change in method of revenue recognition for      (1,013     )     -
VIVITROL product sales
Merger-related costs                             -               26,718     
Non-GAAP Net Income                              $ 123,215       $ 23,493   
                                                                             

Use of Non-GAAP Financial Measures

We use "non-GAAP net income" as a key indicator of the underlying financial
operating performance of Alkermes plc. Non-GAAP net income is not a GAAP
measure of performance and is defined as net income or loss plus or minus the
non-cash portion of net interest expense and provision for or benefit from
income taxes, plus depreciation and amortization of costs, share-based
compensation expense, deferred revenue and other nonrecurring items. We feel
that non-GAAP net income provides management and investors with a better
representation of the ongoing economics of the business and reflects how we
manage the business internally.

                                                           
Condensed Consolidated Balance Sheets          December 31,        March 31,
(In thousands)                             2012            2012
Cash, cash equivalents and total               $ 239,280           $ 246,138
investments
Receivables                                    119,835             96,381
Inventory                                      45,686              39,759
Prepaid expenses and other current             12,697              12,566
assets
Property, plant and equipment, net             292,186             302,995
Intangible assets, net and goodwill            679,055             710,585
Other assets                               23,024          26,793
Total Assets                               $ 1,411,763     $ 1,435,217
Long-term debt — current portion               $ 6,750             $ 3,100
Other current liabilities                      70,529              86,064
Long-term debt                                 362,349             441,360
Deferred revenue - long-term                   9,140               7,578
Other long-term liabilities                    43,056              43,263
Total shareholders' equity                 919,939         853,852
Total Liabilities and Shareholders'        $ 1,411,763     $ 1,435,217
Equity
                                                                   
Ordinary shares outstanding (in                132,420             130,177
thousands)
                                                         

This selected financial information should be read in conjunction with the
consolidated financial statements and notes thereto included in Alkermes plc's
Quarterly Report on Form 10-Q for the three and nine months ended December 31,
2012, which the company intends to file in January 2013.

Contact:

Alkermes Contacts:
For Investors:
Rebecca Peterson, +1 781-609-6378
or
For Media:
Jennifer Snyder, +1 781-609-6166
 
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