Alkermes PLC (ALKS) Q4 2024 Earnings Call Highlights: Strong Revenue Growth and Debt-Free Milestone

GuruFocus.com
13 Feb
  • Total Revenue: Exceeded $1.5 billion in 2024, driven by proprietary commercial portfolio.
  • EBITDA: More than $450 million for continuing operations in 2024.
  • Cash Position: Ended 2024 with $825 million in cash on the balance sheet.
  • Debt: Retired all debt, ending 2024 debt-free.
  • Share Repurchase: Repurchased approximately 8 million shares in 2024.
  • VIVITROL Net Sales: $457.3 million in 2024, reflecting 14% growth year-over-year.
  • ARISTADA Net Sales: $346.2 million in 2024, a 6% increase year-over-year.
  • LYBALVI Net Sales: $280 million in 2024, a 46% increase year-over-year.
  • Manufacturing and Royalty Revenue: $474.1 million in 2024.
  • Cost of Goods Sold: $245.3 million in 2024.
  • R&D Expenses: $245.3 million in 2024.
  • SG&A Expenses: $645.2 million in 2024.
  • GAAP Net Income: $372.1 million in 2024.
  • Non-GAAP Net Income: $494.4 million in 2024.
  • 2025 Revenue Guidance: Expected to be in the range of $1.34 billion to $1.43 billion.
  • 2025 EBITDA Guidance: Expected to be in the range of $215 million to $245 million.
  • 2025 Adjusted EBITDA Guidance: Expected to be in the range of $310 million to $340 million.
  • Warning! GuruFocus has detected 7 Warning Signs with SW.

Release Date: February 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Alkermes PLC (NASDAQ:ALKS) achieved over $1.5 billion in revenue for 2024, driven by a strong proprietary commercial portfolio.
  • The company reported more than $450 million in EBITDA for continuing operations, highlighting robust profitability.
  • Alkermes PLC (NASDAQ:ALKS) ended the year debt-free with $825 million in cash, having retired all outstanding debt.
  • The company repurchased approximately 8 million shares, demonstrating a commitment to returning value to shareholders.
  • Significant progress was made in advancing the neuroscience development pipeline, particularly with the ALKS 2680 program in narcolepsy.

Negative Points

  • Alkermes PLC (NASDAQ:ALKS) expects a decrease in manufacturing and royalty revenues by approximately $215 million in 2025 due to the expiration of the INVEGA SUSTENNA US royalty.
  • The company anticipates flat to modest growth for mature products like VIVITROL and ARISTADA, indicating potential challenges in these segments.
  • There is a projected increase in R&D expenses for 2025, reflecting ongoing investments in the ALKS 2680 Phase II programs.
  • Alkermes PLC (NASDAQ:ALKS) faces competitive pressures in the antipsychotic space, necessitating an expansion of its psychiatry sales team.
  • The company expects Q1 2025 to be closer to breakeven on an EBITDA basis due to typical seasonal inventory drawdown patterns and other factors.

Q & A Highlights

Q: With the orexin program studies underway, how are you monitoring adverse events and retention, especially in the NT II study? A: Richard Pops, CEO: We monitor safety on an ongoing basis with a DSMB. The study design includes a six-week double-blind period followed by a seven-week extension. We expect high retention and have not seen anything to dissuade us from that. The logic and data supporting NT2 are strong, and we are encouraged by the dose response observed in our Phase Ib program.

Q: Regarding the competitive dynamics for LYBALVI and ARISTADA, especially with BMS and J&J becoming more active, what are your plans? A: C. Todd Nichols, Chief Commercial Officer: We are expanding our sales force by approximately 80 representatives to maintain a strong competitive share of voice. This expansion will help us maximize demand growth and profitability. We expect the new sales positions to be operational in Q2, with tangible contributions a few quarters from now.

Q: Can you provide insights into the potential differentiation of ALKS 2680 on safety versus TAK-861 in NT1? A: Richard Pops, CEO: Our Phase II design aims to establish safety, tolerability, efficacy, and dose response rigorously. We believe our program is already differentiated with a range of doses and dosing flexibility. The overall tolerability demonstrated in Phase Ib was largely mild to moderate transient side effects with significant efficacy benefits.

Q: What are the key dynamics impacting VIVITROL's mid-single-digit growth rate in scripts? A: C. Todd Nichols, Chief Commercial Officer: Our focus is on expanding in alcohol dependence, which drove 14% demand growth in 2024. We believe subnational dynamics, such as in the VA, will continue to drive growth. VIVITROL is a mature brand, and we expect consistent demand growth.

Q: How quickly can you move into pivotal studies for ALKS 2680 in NT1 or NT2 upon positive data this year? A: Richard Pops, CEO: We are preparing for Phase III as quickly as possible after completing the Phase II studies and meeting with the FDA. We plan to file for breakthrough designation in NT2, which could open discussions about accelerated pathways to market.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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