It has been about a month since the last earnings report for Alkermes (ALKS) . Shares have lost about 6.6% in that time frame, outperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Alkermes due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.How Have Estimates Been Moving Since Then?It turns ou ...

Core Insights - Alkermes is a global biopharmaceutical company focused on therapies for psychiatric and neurological conditions, with a stable revenue stream from its core portfolio [1] Group 1: Company Overview - Alkermes has shifted its focus towards neuroscience, enhancing its core portfolio which includes products like Lybalvi for schizophrenia [1] Group 2: Financial Performance - The company’s main commercial products are generating stable revenues, indicating a solid market position [1]

Research and Development - The company focuses significant resources on R&D programs aimed at developing novel therapeutics in areas of high unmet medical need[83]. - The company plans to file additional patent applications directed to new or improved products and processes in the future[100]. Sales and Marketing - The sales force for VIVITROL in the U.S. consisted of approximately 105 individuals as of December 31, 2024, with major sales to McKesson Corporation (34%), Cardinal Health (21%), and Cencora, Inc. (16%)[87]. - The sales force for ARISTADA, ARISTADA INITIO, and LYBALVI in the U.S. consisted of approximately 355 individuals as of December 31, 2024, with ARISTADA and ARISTADA INITIO sales to McKesson Corporation (38%), Cardinal Health (32%), and Cencora (23%)[88]. Intellectual Property - The company holds various FDA registrations and licenses, including those from the Drug Enforcement Administration and Health Products Regulatory Authority in Ireland[84]. - The company has a proprietary portfolio of patent rights and exclusive licenses, with numerous patents in the U.S. and other countries covering compositions of matter, methods of treatment, and formulations[100]. - The principal U.S. patents for ARISTADA and ARISTADA INITIO have expiration dates in 2030 and 2039, ensuring protection for these products[101]. - The company owns one unexpired U.S. patent for VIVITROL, expiring in 2029, and has granted Teva a license to market a generic version starting January 15, 2027[103]. - The NanoCrystal technology patent portfolio licensed to Janssen includes patents expiring in 2030 in the U.S. and EU, with additional patents for INVEGA TRINZA expiring in 2036 and INVEGA HAFYERA expiring in 2041[104]. - U.S. patents covering VUMERITY are set to expire in 2033, with multiple corresponding non-U.S. patents[105]. - The company holds multiple U.S. patents for LYBALVI, with expiration dates ranging from 2025 to 2041, including several patents expiring in 2031[106]. - U.S. patent protection for ALKS 2680 extends to 2041, along with several pending applications[107]. - The company has exclusive rights through licensing agreements for U.S. patents and pending applications, with obligations for patent expenses and royalties on future sales[108]. - The company faces potential infringement actions from third parties, which could result in high defense costs and unfavorable rulings[109]. - The company relies on trade secrets and know-how, which are not protected by patents, to maintain its competitive position[112]. Regulatory Environment - The FDA review process for new drug applications can take up to 10 months, with priority reviews potentially reducing this to 6 months[119]. - The FDA may require additional post-marketing studies as a condition of approval, which could impact the commercial success of a drug[122]. - The FDA requires prior review and approval for any significant changes to approved products, which can lead to delays and increased costs[124]. - The company must comply with Good Manufacturing Practices (cGMP) and is subject to inspections by regulatory agencies, with non-compliance leading to potential sanctions[130]. - The company faces scrutiny under healthcare fraud and abuse laws, which could result in civil or criminal penalties if violations occur[136]. - The FDA regulates all advertising and promotional activities, limiting claims to those consistent with approved labels[125]. - The DEA regulates controlled substances, and classification as such can delay product launches even after FDA approval[126]. Financial and Market Considerations - The Medicaid rebate program mandates a minimum rebate of 23.1% of average manufacturer price (AMP) or the difference between AMP and the best price, impacting revenue generation[138]. - The Hatch-Waxman Act provides five years of non-patent-related marketing exclusivity for new chemical entities, preventing the approval of generic drugs during this period[132]. - Orphan Drug Exclusivity (ODE) grants seven years of market exclusivity for drugs treating rare diseases, blocking FDA approval of similar applications[135]. - The company’s ability to generate revenue is significantly dependent on reimbursement from third-party payers, which are increasingly challenging product pricing[137]. - Medicare Part D requires manufacturers to provide a 70% discount on brand name drugs when beneficiaries reach the coverage gap, changing to a 10% discount in the initial coverage phase and 20% in the catastrophic phase starting in 2025[140]. - The Inflation Reduction Act of 2022 introduces new financial liabilities for manufacturers in Medicare Part D starting in 2025 and allows the government to negotiate drug prices beginning in 2026[145]. - The 340B program mandates that participating manufacturers charge covered entities no more than the 340B ceiling price, which is calculated based on the average manufacturer price and rebate amounts[141]. - The final Medicaid covered outpatient drug regulation established two calculation methodologies for Average Manufacturer Price (AMP), affecting drug pricing and rebates[143]. Human Resources and Corporate Governance - As of February 7, 2025, the company had approximately 1,800 full-time employees, with a voluntary attrition rate of 9.6% in 2024, below industry benchmarks[152]. - The company is committed to equitable pay and offers comprehensive total rewards packages, including bonuses tied to performance and equity opportunities for certain employees[154]. - The company has conducted periodic employee engagement surveys since 2017 to assess employee sentiment and satisfaction, with plans to continue using the collected data to inform human capital management strategies[156]. - The company has implemented a comprehensive onboarding experience for new employees to connect them with its business values and culture[157]. - The company regularly reviews and updates its internal controls, disclosure controls, and corporate governance policies to ensure compliance with the Sarbanes-Oxley Act of 2002[279]. - If the company cannot conclude effective internal control over financial reporting, it may lead to a decline in the trading price of its ordinary shares due to loss of investor confidence[280]. Compliance and Risk Management - The company is subject to the U.S. Foreign Corrupt Practices Act, which prohibits bribery of foreign officials and requires accurate financial record-keeping[147]. - The General Data Protection Regulation (GDPR) imposes strict obligations on the company regarding the processing of personal data, including health data, for EU residents[149]. - The company must comply with complex environmental, health, and safety laws, which may impose strict liability for pollution and contamination[148]. - The company faces ongoing legislative and regulatory interest regarding the scope and implementation of the 340B program, which may impact its operations[141]. - The company is subject to numerous privacy and security laws, with potential penalties for non-compliance that could adversely affect its business and financial condition[271]. - The company retains cybersecurity insurance to cover costs related to potential breaches, but there is no guarantee that such costs would not exceed the insurance coverage[270]. - The increasing use of social media and artificial intelligence tools presents new risks and challenges for the company, potentially leading to regulatory actions or legal claims[281]. Market Performance - The closing price of the company's ordinary shares on the Nasdaq Global Select Market ranged from $23.01 to $32.56 per share during the year ended December 31, 2024[263]. - The company has experienced significant volatility in its ordinary shares' market price based on business performance, including commercial sales and financial guidance[263]. - The company continues to monitor the long-term impacts of the COVID-19 pandemic on market practices and labor markets to mitigate adverse effects on its operations[277].

Financial Data and Key Metrics Changes - In 2024, the company achieved over $1.5 billion in revenue, primarily from its proprietary commercial portfolio, resulting in more than $450 million of EBITDA from continuing operations [9][15] - The company ended the year with $825 million in cash and no debt, having repurchased approximately 8 million shares [10][23] - For 2025, the company expects to generate over $200 million of EBITDA and total revenues in the range of $1.34 billion to $1.43 billion [10][25] Business Line Data and Key Metrics Changes - VIVITROL net sales reached $457.3 million, reflecting a 14% year-over-year growth, while ARISTADA net sales increased 6% to $346.2 million [17][36] - LYBALVI saw a significant increase in net sales by 46% year-over-year, totaling $280 million [17][40] - The proprietary product portfolio grew 18% year-over-year, generating over $1 billion in net sales [16][34] Market Data and Key Metrics Changes - The company anticipates flat to modest growth for mature products like VIVITROL and ARISTADA in 2025, while LYBALVI is expected to grow by approximately 25% year-over-year [11][40] - Manufacturing and royalty revenues are projected to decrease by approximately $215 million in 2025 due to the expiration of certain royalties and the conclusion of legacy manufacturing revenues [25] Company Strategy and Development Direction - The company aims to become a highly profitable, fully integrated neuroscience biopharmaceutical company, focusing on commercial execution and pipeline progress [7][8] - Key value drivers for 2025 include data readouts for the lead development candidate, ALKS 2680, which is in Phase 2 studies for narcolepsy [12][44] - The company is transitioning to an adjusted EBITDA metric to better capture the dynamics of its underlying business [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing safety monitoring of the orexin program and the potential for ALKS 2680 to differentiate itself in the market [60][91] - The company is optimistic about the competitive positioning of its products and the overall growth in the neuroscience market [43][78] Other Important Information - The company completed the sale of its manufacturing business in Ireland, which is expected to enhance gross margins going forward [16] - The company plans to expand its sales force by approximately 80 representatives to enhance competitive positioning in the psychiatry market [72][41] Q&A Session Summary Question: Inquiry about the Orexin program and monitoring of adverse events - Management confirmed ongoing safety monitoring through a Data Safety Monitoring Board (DSMB) and expressed confidence in retention rates during the study [60][61] Question: Competitive dynamics for LYBALVI and ARISTADA - Management acknowledged the competitive landscape but emphasized that market growth could benefit their portfolio, with plans to expand the sales force to maintain a strong market presence [68][70] Question: Timing of pivotal studies for ALKS 2680 - Management indicated that they hope to initiate Phase 3 studies quickly after completing Phase 2 and having discussions with the FDA [138] Question: Sources of funding for VIVITROL and Medicaid implications - Management noted that approximately 50% of VIVITROL's business comes from Medicaid, and they are prepared to advocate for access to medications amid potential Medicaid reforms [126][130]

Forward-Looking Statements and Non-GAAP Financial Information Certain statements set forth in this presentation constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including, but not limited to, statements concerning: Alkermes plc's (the "Company") expectations with respect to its current and future financial, commercial and operating performance, business plans or prospects, including its expected revenue and profitability. The Com ...

Core Viewpoint - Alkermes reported quarterly earnings of $1.04 per share, exceeding the Zacks Consensus Estimate of $0.81 per share, and showing significant growth from $0.48 per share a year ago, indicating a strong performance in the recent quarter [1] Group 1: Earnings Performance - The earnings surprise for the recent quarter was 28.40%, compared to a previous quarter where the company reported earnings of $0.73 per share against an expectation of $0.78, resulting in a surprise of -6.41% [1][2] - Over the last four quarters, Alkermes has surpassed consensus EPS estimates only once [2] Group 2: Revenue Performance - Alkermes generated revenues of $429.99 million for the quarter ended December 2024, which surpassed the Zacks Consensus Estimate by 13.56% and increased from $377.48 million year-over-year [2] - The company has exceeded consensus revenue estimates two times in the last four quarters [2] Group 3: Stock Performance and Outlook - Alkermes shares have appreciated approximately 11.1% since the beginning of the year, outperforming the S&P 500's gain of 3.2% [3] - The future stock price movement will largely depend on management's commentary during the earnings call and the earnings outlook [3][4] Group 4: Earnings Estimates and Industry Outlook - The current consensus EPS estimate for the upcoming quarter is $0.39 on revenues of $325.75 million, and for the current fiscal year, it is $1.87 on revenues of $1.39 billion [7] - The Medical - Biomedical and Genetics industry, to which Alkermes belongs, is currently ranked in the top 29% of over 250 Zacks industries, indicating a favorable industry outlook [8]

Financial Performance - Total revenues for 2024 were reported at $1.56 billion, with proprietary product net sales increasing approximately 18% year-over-year [1][3] - GAAP net income from continuing operations was $372 million, translating to diluted GAAP earnings per share of $2.20 for 2024 [1][3] - The company generated over $1 billion in revenue from its proprietary commercial product portfolio and delivered EBITDA from continuing operations of approximately $452 million [2][3] Product Performance - Proprietary net sales for the fourth quarter of 2024 were $307.7 million, compared to $242.0 million in the same quarter of 2023, marking a significant increase [3][12] - Key products included VIVITROL® with revenues of $134.1 million (up 31% year-over-year), ARISTADA® with $96.6 million (up 16%), and LYBALVI® with $77.0 million (up 37%) [3][12] Operational Developments - The company completed the sale of its manufacturing business in Ireland and ended 2024 debt-free with approximately $825 million in cash and investments [2][13] - Ongoing Phase 2 studies for ALKS 2680 in narcolepsy are expected to yield data in the second half of 2025, with plans to initiate additional studies in idiopathic hypersomnia [2][1] Financial Expectations for 2025 - The company anticipates total revenues between $1.34 billion and $1.43 billion for 2025, with specific net sales expectations for VIVITROL, ARISTADA, and LYBALVI [15] - Projected GAAP net income for 2025 is estimated to be between $175 million and $205 million, with EBITDA expected to range from $215 million to $245 million [15][34]

Core Viewpoint - Alkermes plc will host a conference call and webcast on February 12, 2025, to discuss its fourth quarter and year-end 2024 financial results, along with financial expectations for 2025 and company updates [1]. Company Overview - Alkermes plc is a global biopharmaceutical company focused on developing innovative medicines in neuroscience, with a portfolio addressing alcohol dependence, opioid dependence, schizophrenia, and bipolar I disorder [3]. - The company has a pipeline of clinical and preclinical candidates targeting neurological disorders, including narcolepsy and idiopathic hypersomnia [3]. - Alkermes is headquartered in Ireland, with additional offices and facilities in Massachusetts and Ohio [3].

Corporate Presentation at J.P. Morgan Healthcare Conference - Alkermes plc will present its corporate presentation at the J.P. Morgan Healthcare Conference on January 15, 2025, including expectations for cash and investments for the year ended December 31, 2024 [5] - The corporate presentation is furnished as Exhibit 99.1 and incorporated by reference in Item 7.01 [6] - Alkermes plc's corporate presentation is listed as Exhibit 99.1 in the Exhibit Index [9] Form 8-K Filing Information - The information in the Form 8-K, including Items 2.02 and 7.01, is not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 [7]

Group 1 - Alkermes plc will participate in two upcoming investor conferences: the 7th Annual Evercore ISI HealthCONx Conference on December 3, 2024, and the Piper Sandler 36th Annual Healthcare Conference on December 4, 2024 [1] - The live webcasts of the conferences will be accessible under the Investors tab on Alkermes' website and will be archived for 14 days [1] Group 2 - Alkermes plc is a global biopharmaceutical company focused on developing innovative medicines in neuroscience [2] - The company has a portfolio of proprietary commercial products targeting alcohol dependence, opioid dependence, schizophrenia, and bipolar I disorder [2] - Alkermes is headquartered in Ireland, with additional offices in Massachusetts and a manufacturing facility in Ohio [2]