Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Alkermes PLC (ALKS, Financial) reported strong growth in its proprietary product portfolio, with net sales reaching $273 million, reflecting an 18% year-over-year increase.
- Vivitrol net sales grew by 14% year-over-year, driven by demand in the alcohol dependence indication, with expectations to reach the high end of the $410-$430 million range for the full year.
- Lybalvi showed significant growth with net sales of $74.7 million, a 37% year-over-year increase, supported by strong demand and expanded prescriber reach.
- The company is in a strong financial position with $927.8 million in cash and investments, and has repurchased 4.4 million shares as part of a $400 million share repurchase program.
- Alkermes PLC (ALKS) is advancing its ALKS 2680 clinical program with positive phase 1B data, and phase 2 studies are underway, expected to be a transformative catalyst for the company.
Negative Points
- The Aristada product family experienced softness in the schizophrenia long-acting antipsychotic market, with expectations for net sales to be at the lower end of the $340-$360 million range.
- Manufacturing and royalty revenues decreased, with a notable drop in revenues from long-acting Invega products, impacting overall financial performance.
- The company anticipates a significant impact on royalty and manufacturing revenues in 2025, with a projected decrease of approximately $200 million due to the conclusion of certain royalties and manufacturing transitions.
- Operating expenses are expected to increase modestly in 2025, driven by investments in the ALKS 2680 program and expansion of the psychiatry commercial footprint.
- Alkermes PLC (ALKS) faces competitive dynamics in the antipsychotic space, requiring increased investment in personal promotion to maintain market share.
Q & A Highlights
Q: Do you foresee any competitive threat from GLP-1 drugs on the Vivitrol business, particularly in the alcohol dependence indication?
A: Todd Nichols, Chief Commercial Officer, stated that they are monitoring the market closely but do not currently see GLP-1 drugs impacting Vivitrol. The strong demand for Vivitrol is driven by the alcohol dependence indication, and they expect continued growth in this area.
Q: Are you anticipating abuse potential studies for the Orexin class as part of the clinical development program?
A: Richard Pops, CEO, confirmed that they will be conducting preclinical and clinical abuse potential studies as a standard procedure for CNS active compounds.
Q: Can you clarify the expected EBITDA for 2025, given the transition in manufacturing and royalty revenues?
A: Blair Jackson, Chief Operating Officer, explained that the expected EBITDA for 2025 is over $200 million, primarily due to the transition away from Invega Sustenna royalties and manufacturing revenue shifts. They plan to invest in growth opportunities, particularly in the ALKS 2680 program and expanding the commercial footprint for Lybalvi and Aristada.
Q: What are the biggest risks in translating early data for ALKS 2680 into successful phase two studies for NT2 and IH?
A: Richard Pops, CEO, noted that the biggest risk is the variability in patient populations, particularly in NT2 and IH. They are focusing on endpoints like the maintenance of wakefulness test to address this variability.
Q: How do you view the potential impact of an LAI form of Olanzapine on LYBALVI's market position?
A: Todd Nichols, Chief Commercial Officer, stated that LYBALVI is well-established due to its efficacy and weight mitigation profile. They do not foresee an LAI Olanzapine impacting LYBALVI significantly, as the core issue with Olanzapine therapies is weight gain, which LYBALVI addresses.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
