Alkermes(ALKS)2022-11-02 17:41Financial Data and Key Metrics Changes - Total revenues for Q3 2022 were $252.4 million, driven primarily by proprietary commercial products [20] - GAAP net loss for the quarter was $64 million, while non-GAAP net income was $3.5 million [25] - The company ended the quarter with approximately $747 million in cash and a positive net cash position of close to $453 million [26] Business Line Data and Key Metrics Changes - VIVITROL net sales were $96.5 million, reflecting a 9% year-over-year growth [20][35] - ARISTADA product family generated net sales of $75.7 million, a 10% increase year-over-year [21] - LYBALVI net sales increased 35% sequentially to $27.1 million, driven by strong underlying demand growth of 36% [22] - Manufacturing and Royalty revenues were $52.9 million, a significant decrease from $136.3 million in the prior year due to J&J's termination of royalties [23] Market Data and Key Metrics Changes - The company expects total revenues for 2022 to be in the range of $1.07 billion to $1.12 billion, reflecting an increase due to improved expectations for LYBALVI [27] - The oncology business is expected to attract its own capital to expand its program, particularly with the potential of nemvaleukin [48] Company Strategy and Development Direction - The company plans to explore separating its oncology and neuroscience businesses, potentially spinning off the oncology business into an independent publicly traded company [8][11] - The separation is expected to enhance strategic focus for each business and simplify capital allocation decision-making [12][19] - The neuroscience business aims to build on its heritage of innovation and focus on significant unmet needs within the field [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term value of LYBALVI, which supports the commercial and administrative side of the business [41] - The impact of the Inflation Reduction Act is seen as a catalyst for the oncology business, making biologic medicines more valuable [16] - The company anticipates completing the separation in the second half of 2023, with further details to be provided later [17] Other Important Information - The company is focused on unlocking shareholder value and positioning both the neuroscience and oncology businesses for growth and success [28] - The strong performance of LYBALVI is expected to drive enhanced profitability for the neuroscience business [19] Q&A Session Summary Question: What can be inferred from the spin announcement and confidence in LYBALVI? - The decision to spin was based on growing confidence in LYBALVI's long-term value, which supports the commercial side of the business [41] Question: When should investors expect a DSMB look into ARISTADA 6 and 7 in 2023? - The timing of the spin is fortunate as it will allow for enrollment in ARISTADA 6 and 7 until the spin is complete, providing precise understandings about readouts and interim looks [43] Question: How does the company envision the profile of the stand-alone neuroscience business? - The stand-alone neuroscience business is expected to have enhanced profitability driven by synergies from multiple products and growth of LYBALVI [48] Question: What is the long-term outlook for VIVITROL's growth? - Long-term growth for VIVITROL is expected to be driven by adoption within the alcohol dependence market, which represents a significant opportunity [65] Question: What are the funding requirements for the oncology business post-spin? - The oncology business will be funded within the context of the combined company until the second half of next year, with insights into funding requirements to be determined at that time [72]