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Exploring Alkermes’ Financial Performance in Fiscal 2017

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Feb. 27 2018, Updated 9:03 a.m. ET

Revenue trend

Alkermes (ALKS) generated total revenues of $903.0 million in fiscal 2017 compared with $745.6 million in fiscal 2016. The company has four revenue streams: product sales, manufacturing and royalty revenues, licensing revenues, and research and development revenues.

Alkermes’ manufacturing and royalty revenues totaled $505.3 million in fiscal 2017 compared with $487.2 million in fiscal 2016. Alkermes primarily earns manufacturing and royalty revenues from key drugs like Xeplon, Trevicta, Ampyra, Fampyra, and Risperdal Consta.

Alkermes’ product sales surged to $362.8 million in fiscal 2017 from $256.1 million in fiscal 2016. Alkermes primarily generates its product sales from two drugs, Vivitrol and Aristada.

In fiscal 2017, gross sales of Vivitrol and Aristada grew 33.0% and 129.0%, respectively, over fiscal 2016. Its revenues from research and development tripled from $2.3 million in fiscal 2016 to $7.2 million in fiscal 2017.

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Licensing revenues totaled $28 million in fiscal 2017. These revenues represent the upfront payment of $28.0 million received by Alkermes from Biogen (BIIB). This payment was in consideration for the licensing agreement for BIIB098 and other products, which both companies entered into in November 2017

Operating expenses

Alkermes (ALKS) incurred expenses of $154.7 million for the cost of goods sold in fiscal 2017 compared with $13.1 million in fiscal 2016. The research and development expenses incurred by the company totaled $412.8 million in fiscal 2017 compared with $387.1 million in fiscal 2016.

The selling, general, and administrative expenses incurred by the company grew to $421.5 million in fiscal 2017 compared with $374.1 million in fiscal 2016. The total operating expenses incurred by Alkermes reached $1.0 billion in fiscal 2017 compared with $954.3 million in fiscal 2016.

Bottom line

Alkermes’ net loss decreased from $208.4 million in fiscal 2016 to $157.9 million in fiscal 2017. This translated into a net loss of $1.03 per share in fiscal 2017 compared with $1.38 per share in fiscal 2016.

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