Why Is Alkermes (ALKS) Down 5.5% Since Last Earnings Report?

Core Viewpoint - Alkermes reported strong Q3 earnings and raised its 2025 revenue guidance, despite a recent decline in share price and downward estimate revisions from analysts [2][11][13]. Financial Performance - Alkermes reported earnings from continuing operations of 49 cents per share for Q3 2025, exceeding the Zacks Consensus Estimate of 42 cents and up from 56 cents per share in the same quarter last year [2]. - Total revenues for Q3 reached $394.2 million, a 4% increase year-over-year, significantly surpassing the Zacks Consensus Estimate of $355.7 million [3]. - Sales from proprietary products grew 16% year-over-year to $317.4 million, driven by strong demand for Vivitrol, Aristada, and Lybalvi, exceeding management's expectations of $280-$300 million [5]. Product Sales Breakdown - Vivitrol sales increased 7% year-over-year to $121.1 million, beating the Zacks Consensus Estimate of $112.1 million [6]. - Aristada sales rose 16% year-over-year to $98.1 million, surpassing the Zacks Consensus Estimate of $87 million [7]. - Lybalvi generated sales of $98.2 million, up 32% year-over-year, exceeding the Zacks Consensus Estimate of $87.1 million [8]. Revenue Sources - Alkermes' revenue includes net sales from proprietary products and manufacturing/royalty revenues from partnered products [4]. - Manufacturing and royalty revenues decreased approximately 27% year-over-year to $76.8 million, with specific contributions from Biogen's Vumerity and other products [9]. Expense Overview - Research and development expenses totaled $81.7 million, a 36% increase year-over-year, primarily due to ongoing studies on alixorexton [9]. - Selling, general, and administrative expenses reached $171.8 million, up 14% year-over-year, attributed to the expansion of the psychiatry field organization and increased promotional activities for Lybalvi [10]. 2025 Guidance - Alkermes raised its 2025 revenue guidance to a range of $1.43-$1.49 billion, up from the previous range of $1.34-$1.43 billion [11]. - Expected net sales for Vivitrol are now $460-$470 million, Aristada $360-$370 million, and Lybalvi $340-$350 million for the full year [12]. Market Position and Outlook - Despite a recent downward trend in estimates, Alkermes holds a Zacks Rank 3 (Hold), indicating an expectation of in-line returns in the coming months [15]. - The company has a subpar Growth Score of D but a better Momentum Score of C, with an aggregate VGM Score of B, indicating a favorable position for value investors [14].