Alkermes(US:ALKS)2025-10-28 13:20Financial 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]