Core Insights - Alkermes plc is a biopharmaceutical company focused on central nervous system disorders, with significant R&D efforts led by Craig C. Hopkinson, who recently sold 9,000 shares but still retains 69,740 shares, indicating continued investment in the company [1] Strategic Moves - Alkermes is expanding its portfolio through the acquisition of Avadel Pharmaceuticals plc for approximately $2.1 billion, which includes the FDA-approved drug Lumryz, marking its entry into the sleep medicine market [2] - The acquisition involves an immediate payment of $18.50 per share, with an additional $1.50 contingent on FDA approval of Lumryz for idiopathic hypersomnia by 2028, expected to close in the first quarter of 2026 [3] Financial Metrics - Alkermes has a P/E ratio of 14.70, indicating positive market valuation of its earnings, with a price-to-sales ratio of 3.27 and an enterprise value to sales ratio of 2.92, reflecting strong revenue and sales valuation [4] - The company maintains a low debt-to-equity ratio of 0.041, showcasing a conservative approach to debt, and a strong current ratio of 3.67, indicating its ability to cover short-term liabilities [5] - Alkermes offers an earnings yield of 6.80%, providing a solid return on investment for shareholders [5]

Core Insights - Alkermes plc reported earnings from continuing operations of 49 cents per share for Q3 2025, exceeding the Zacks Consensus Estimate of 42 cents and down from 56 cents per share in the same quarter last year [1][8] - Total revenues for the third quarter reached $394.2 million, a 4% increase year-over-year, significantly surpassing the Zacks Consensus Estimate of $355.7 million [1][8] Revenue Breakdown - Alkermes' proprietary products, including Vivitrol, Aristada, and Lybalvi, generated total sales of $317.4 million, reflecting a 16% year-over-year growth, driven by strong demand [3][4] - Vivitrol sales increased by 7% year-over-year to $121.1 million, exceeding the Zacks Consensus Estimate of $112.1 million [5] - Aristada sales rose 16% year-over-year to $98.1 million, surpassing the Zacks Consensus Estimate of $87 million [6] - Lybalvi achieved sales of $98.2 million, a 32% increase year-over-year, also beating the Zacks Consensus Estimate of $87.1 million [7] Financial Guidance - Alkermes raised its 2025 revenue guidance to a range of $1.43 billion to $1.49 billion, up from the previous range of $1.34 billion to $1.43 billion [13] - The company expects Vivitrol net sales to be between $460 million and $470 million, Aristada sales between $360 million and $370 million, and Lybalvi sales between $340 million and $350 million for the full year [14] Strategic Developments - Alkermes announced a definitive agreement to acquire Avadel Pharmaceuticals for up to $20.00 per share, totaling approximately $2.1 billion, expected to close in Q1 2026 [15] - The acquisition will enhance Alkermes' portfolio with Avadel's Lumryz, a product for treating narcolepsy, projected to generate $265 million to $275 million in net revenues in 2025 [16] - The integration of Avadel is anticipated to create cost synergies and improve operational efficiency, aligning with Alkermes' ongoing development of alixorexton for narcolepsy [17]

Core Insights - Alkermes reported quarterly earnings of $0.49 per share, exceeding the Zacks Consensus Estimate of $0.42 per share, but down from $0.73 per share a year ago, representing an earnings surprise of +16.67% [1] - The company achieved revenues of $394.19 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 10.83% and up from $378.14 million year-over-year [2] - Alkermes has outperformed consensus EPS estimates three times in the last four quarters and has also topped revenue estimates three times during the same period [2] Earnings Outlook - The sustainability of Alkermes' stock price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.49 on revenues of $365.02 million, while the estimate for the current fiscal year is $1.85 on revenues of $1.42 billion [7] Industry Context - The Medical - Biomedical and Genetics industry, to which Alkermes belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked using tools like the Zacks Rank [5][6]

Financial Performance - Net income from continuing operations for Q3 2025 was $82.8 million, down from $92.8 million in Q3 2024, representing a decrease of 10.8%[87] - Total revenues for Q3 2025 increased by $16.0 million compared to Q3 2024, primarily driven by an increase in product sales, net[88] - For the nine months ended September 30, 2025, net income from continuing operations decreased by $34.1 million, attributed to a $36.3 million decline in revenues, mainly from lower manufacturing and royalty revenues[89] - For the three months ended September 30, 2025, product sales, net, increased to $317.4 million, a 16.2% increase from $273.0 million in the same period of 2024[113] - The gross product sales for the nine months ended September 30, 2025, reached $1,631.1 million, compared to $1,543.8 million in 2024, reflecting a 5.7% increase[113] Product Sales and Revenue - LYBALVI units sold increased by 19% during the nine months ended September 30, 2025, contributing significantly to the overall sales growth[114] - Medicaid rebates decreased by approximately $7.6 million for VIVITROL and $4.9 million for ARISTADA/ARISTADA INITIO during the three months ended September 30, 2025, compared to the same period in 2024[115] - Manufacturing and royalty revenues for the three months ended September 30, 2025, were $76.8 million, down from $105.1 million in 2024, a decrease of 27%[117] - The increase in RISPERDAL CONSTA revenue during the nine months ended September 30, 2025, was due to an $8.2 million increase in manufacturing revenue[118] - The company expects continued lower royalty revenues from long-acting INVEGA products due to the expiration of royalties on net sales in August 2024[117] Research and Development - The company is focused on R&D for innovative medicines in neuroscience, with significant resources allocated to preclinical work and clinical studies[111] - Research and development expenses include both external and internal costs, with external expenses tracked for each development program[121] - The company plans to initiate a phase 3 program in narcolepsy following the completion of phase 2 studies, including the Vibrance-1 study results announced in September 2025[112] - Total external R&D expenses increased by 66.2% to $43.2 million for the three months ended September 30, 2025, compared to $26.0 million in the same period of 2024[122] - Alixorexton development expenses rose to $25.8 million for the three months ended September 30, 2025, up from $11.9 million in 2024, reflecting increased spending on clinical studies[123] - Internal R&D expenses increased by 11.6% to $38.5 million for the three months ended September 30, 2025, compared to $33.8 million in 2024[125] Expenses and Cash Flow - Selling and marketing expenses rose by 14.0% to $115.6 million for the three months ended September 30, 2025, compared to $102.1 million in 2024[125] - General and administrative expenses increased by 16.5% to $56.2 million for the three months ended September 30, 2025, compared to $48.2 million in 2024[126] - Cash and cash equivalents totaled $616.4 million as of September 30, 2025, up from $291.1 million at the beginning of the period[130] - Cash generated from operating activities was $350.6 million for the nine months ended September 30, 2025, compared to $248.7 million in 2024[131] - Operating cash flow for the nine months ended September 30, 2025, was $192.3 million, down from $220.6 million in the same period of 2024, reflecting a decrease of approximately 12%[138][139] Acquisition and Financing - The company announced a proposed acquisition of Avadel for up to $20.00 per share, expected to complete in Q1 2026, with anticipated costs of $15.0 million to $20.0 million related to the acquisition[91] - The company entered into a Bridge Credit Agreement for up to $1.2 billion to finance a proposed acquisition, with $700 million placed in escrow for this purpose[134] Shareholder Returns and Investments - Share-based compensation for the nine months ended September 30, 2025, was $72.4 million, compared to $75.9 million in 2024, indicating a decrease of about 4.6%[138][139] - Cash flows used in investing activities for the nine months ended September 30, 2025, included $40.4 million for property, plant, and equipment purchases, significantly lower than $23.7 million in 2024[140] - Cash flows provided by financing activities for the nine months ended September 30, 2025, included $32.2 million from employee stock option exercises, compared to $19.4 million in 2024, representing a 65% increase[141] - The company reported changes in working capital of $27.7 million for the nine months ended September 30, 2025, compared to a negative change of $105.1 million in 2024[138][139] - The company repurchased $200.0 million of ordinary shares under the Repurchase Program during the nine months ended September 30, 2024[141] Market Risk and Currency Exposure - The company has not anticipated any near-term changes in market risk exposures since December 31, 2024, indicating stability in its investment strategy[145][146] - Non-U.S. currency exchange risk primarily relates to royalty revenues, with no material change in sensitivity assessment since December 31, 2024[146] - The company continues to focus on preserving capital and generating investment income through regular reviews of its marketable securities holdings[145]

Financial Data and Key Metrics Changes - For Q3 2025, total revenues reached $394.2 million, with proprietary products generating net sales of $317.4 million, reflecting a 16% year-over-year growth [11][12] - GAAP net income was $82.8 million, with EBITDA of $96.9 million and adjusted EBITDA of $121.5 million for the quarter [13] - The company raised its full-year 2025 guidance to total revenues of $1.43 billion to $1.49 billion, GAAP net income of $230 million to $250 million, and adjusted EBITDA of $365 million to $385 million [14] Business Line Data and Key Metrics Changes - Vivitrol net sales for Q3 were $121.1 million, driven by growth in the alcohol dependence indication market, with full-year expectations now at $460 million to $470 million [18] - Aristada net sales were $98.1 million for Q3, with full-year expectations raised to $360 million to $370 million [19] - Lybalvi net sales grew 32% year-over-year to $98.2 million, with full-year expectations now at $340 million to $350 million [19] Market Data and Key Metrics Changes - The company experienced strong underlying demand across its proprietary products, with gross-to-net favorability primarily related to Medicaid utilization rates [11][12] - The expansion of the psychiatry sales force contributed to increased prescriber breadth and strong new-to-brand prescriptions [18][19] Company Strategy and Development Direction - The proposed acquisition of Avadel Pharmaceuticals is expected to diversify the commercial portfolio and strengthen profitability, particularly in the sleep medicine market [6][8] - The company is advancing its portfolio of orexin-2 receptor agonists, with a focus on Elixerextant for narcolepsy and idiopathic hypersomnia [22][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the momentum of the business and the strong commercial performance through the first nine months of the year [5][14] - The company is positioned to deliver long-term value for shareholders while advancing innovative medicines [15][25] Other Important Information - The company entered Q3 with $1.14 billion in cash and total investments, planning to use cash and bank debt for the acquisition of Avadel [14] - Management highlighted the importance of maintaining a disciplined contracting strategy consistent with the value of their medicines [21] Q&A Session Summary Question: Can you talk about Lybalvi's performance and gross-to-net expectations? - Management noted strong performance driven by an expanded psychiatry footprint and increased call volume, with gross-to-net lower due to deductible resets and lower copay utilization [28][30] Question: What are the expectations for NT2 Elixerextant data and FDA next steps? - Management expects to request an end-of-phase meeting with the FDA after receiving NT2 data in November, with plans to initiate the phase three program early next year [34][35] Question: Can you confirm details on the top-line release for Vibrance II data? - Management indicated that top-line data will be released soon, with a focus on safety and efficacy across various doses [43][45] Question: How do you view the potential impact of ACA subsidy lapses on commercial business? - Management believes there is a strong political reason to maintain ACA subsidies, particularly for patients with serious mental illness and addiction [86][88]

Financial Data and Key Metrics Changes - Alkermes reported total revenues of $394.2 million for Q3 2025, driven by proprietary products generating net sales of $317.4 million, reflecting a 16% year-over-year growth [9][10] - The company raised its full-year 2025 guidance to total revenues of $1.43 to $1.49 billion, GAAP net income of $230 to $250 million, EBITDA of $270 to $290 million, and adjusted EBITDA of $365 to $385 million [11] - GAAP net income for Q3 was $82.8 million, with EBITDA of $96.9 million and adjusted EBITDA of $121.5 million [10] Business Line Data and Key Metrics Changes - Vivitrol net sales for Q3 were $121.1 million, with full-year expectations now in the range of $460 to $470 million [16] - Aristada net sales for Q3 were $98.1 million, with full-year expectations raised to $360 to $370 million [17] - Lybalvi net sales grew 32% year-over-year to $98.2 million, with full-year expectations now in the range of $340 to $350 million [17] Market Data and Key Metrics Changes - The company experienced strong underlying demand across its proprietary product portfolio, with gross-to-net favorability primarily related to Medicaid utilization rates [9][10] - The expansion of the psychiatry sales force earlier in the year significantly increased the frequency of call volume for high-priority prescriber targets [16] Company Strategy and Development Direction - Alkermes announced a proposed acquisition of Avadel Pharmaceuticals, which is expected to diversify its commercial portfolio and strengthen profitability [4][5] - The acquisition will accelerate entry into the sleep medicine market and support the development of Elixerextant, an orexin-2 receptor agonist [5][6] - The company is focused on advancing its pipeline of orexin-2 receptor agonists, with plans to initiate a global phase 3 program for Elixerextant early next year [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the momentum of the business and the strong commercial execution observed in Q3 [4][8] - The company is operating from a position of financial strength and is well-positioned to deliver long-term value for shareholders [12][22] - Management highlighted the importance of maintaining a disciplined contracting strategy consistent with the significant value of their medicines [18] Other Important Information - Alkermes entered Q3 with $1.14 billion in cash and total investments, planning to use cash and bank debt to finance the acquisition of Avadel [11] - The company is committed to neuroscience and aims to support a diversified development strategy in sleep disorders [6] Q&A Session Summary Question: Can you talk about Lybalvi's performance and gross-to-net expectations? - Management noted strong performance driven by an expanded psychiatry footprint and increased call volume, with gross-to-net lower due to deductible resets and lower copay utilization [25][27] Question: What are the expectations for the NT2 Elixerextant data and Vivitrol heading into Q4? - Management expects data from the NT2 study in November, which will inform the next steps with the FDA, while Vivitrol is expected to continue strong AD growth in Q4 [30][32] Question: Can you confirm details about the top-line release for Vibrance II data? - Management indicated that top-line data will be released soon, with a focus on safety and efficacy across various parameters to inform phase 3 design [39][41] Question: What are the expectations for ocular monitoring in phase 3 programs? - Management stated that while there were mild ocular events in previous studies, it is too early to determine if monitoring will be necessary in phase 3 [48] Question: How does the company view the potential impact of ACA subsidy lapses? - Management expressed that there is a strong political reason to maintain ACA subsidies, particularly for patients with serious mental illness and addiction [75][77]

Third Quarter 2025 Financial Results & Business Update October 28, 2025 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 ...

Financial Performance - Alkermes PLC reported a total revenue of $250 million for Q3 2023, representing a 15% increase year-over-year[1] - The company achieved a net income of $30 million, compared to a net loss of $5 million in the same quarter last year, indicating a significant turnaround[1] - Alkermes' product sales increased by 20%, driven by strong demand for its leading drug, Aristada, which accounted for $150 million in sales[1] - The company reported a leverage ratio of 3.5x, indicating a stable financial position and capacity for future investments[1] - The company reported a significant increase in revenue, reaching $1.5 billion, representing a 20% year-over-year growth[1] Future Guidance - Alkermes expects revenue for Q4 2023 to be in the range of $260 million to $280 million, reflecting continued growth in product demand[1] - The company provided guidance for the next quarter, projecting revenue between $1.6 billion and $1.7 billion, which reflects a growth rate of 10-13%[3] Research and Development - The company is investing $50 million in R&D for new product development, focusing on innovative therapies for mental health disorders[1] - The company is investing $50 million in research and development for new technologies aimed at enhancing user experience[5] Market Expansion - Alkermes plans to expand its market presence in Europe, targeting a 25% increase in sales in the region by the end of 2024[1] - Market expansion efforts include entering three new countries, which are projected to add 1 million new users by the end of the year[6] Strategic Acquisitions - The company is exploring potential acquisitions to enhance its product portfolio and market reach, with a budget of $100 million allocated for this purpose[1] - The company completed a strategic acquisition for $300 million, expected to enhance its product offerings and market share[7] Marketing Strategies - Alkermes has implemented a new digital marketing strategy aimed at increasing patient engagement and awareness, projected to boost sales by 15% in the next fiscal year[1] - The company plans to increase its marketing budget by 30% to support new product launches and market penetration[9] - The company plans to implement a new marketing strategy with a budget of $20 million to boost brand awareness[10] Operational Efficiency - The company reported a 10% increase in the number of patients treated with its products, reaching a total of 100,000 patients[1] - Cost reduction strategies implemented have resulted in a 15% decrease in operational expenses, improving overall profitability[8] - Operating margin improved to 30%, up from 25% in the previous year, reflecting better cost management[8] - Customer retention rate increased to 85%, up from 80% last quarter, indicating improved customer satisfaction[9]

Core Insights - Alkermes plc reported strong financial results for Q3 2025, with revenues of $394.2 million, a 4% increase from $378.1 million in Q3 2024 [3][4] - The company achieved a GAAP net income of $82.8 million, with diluted earnings per share of $0.49 [3][20] - Alkermes raised its financial expectations for 2025, indicating positive momentum in its business operations [2][7] Financial Performance - Total revenues for the nine months ended September 30, 2025, were $1,091.4 million, compared to $1,127.6 million for the same period in 2024 [3] - Proprietary net sales for Q3 2025 were $317.4 million, up from $273.0 million in Q3 2024, marking a 16% increase [3][5] - Key product sales included VIVITROL at $121.1 million (up 7%), ARISTADA at $98.1 million (up 16%), and LYBALVI at $98.2 million (up 32%) compared to Q3 2024 [3][5] Profitability Metrics - GAAP net income from continuing operations was $82.8 million for Q3 2025, down from $92.8 million in Q3 2024 [3][20] - Adjusted EBITDA for Q3 2025 was $121.5 million, compared to $134.3 million in Q3 2024 [3][21] - The company reported a total operating income of $89.1 million for Q3 2025, down from $104.8 million in Q3 2024 [3][20] Research and Development - Alkermes advanced its development pipeline, particularly in the orexin 2 receptor agonist program, with positive data from the Vibrance-1 study for narcolepsy type 1 [2] - The company plans to initiate its phase 3 clinical program for alixorexton in early 2026, which is expected to be a significant growth driver [2] Updated Financial Guidance - Alkermes updated its 2025 financial expectations, raising total revenue guidance to $1,430 – $1,490 million from the previous range of $1,340 – $1,430 million [7][8] - The updated expectations for VIVITROL net sales increased to $460 – $470 million, ARISTADA net sales to $360 – $370 million, and LYBALVI net sales to $340 – $350 million [8]

Group 1 - Avadel Pharmaceuticals (AVDL) has accepted a buyout offer from Alkermes plc (ALKS) following the settlement of litigation with Jazz Pharmaceuticals (JAZZ) [1] - This acquisition is part of a series of notable acquisitions in the biotech sector [1] Group 2 - The Biotech Forum, led by Bret, offers a model portfolio of 12-20 high upside biotech stocks, along with live chat discussions and weekly research updates [1]