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Alkermes in the Third Quarter: A Performance Overview

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Revenue trends

Alkermes (ALKS) reported its third-quarter financial results on October 23. It generated net revenues of $248.7 million compared to $217.4 million in the third quarter of 2017. That was a 14% YoY (year-over-year) growth.

Its manufacturing and royalty revenues were $116.4 million, a 5% YoY decline. Those revenues came primarily from Risperdal Consta, Invega Sustenna/Xeplion, and Invega Trinza.

Alkermes reported net revenues from product sales of $166.3 million compared to $96.7 million in the third quarter of 2017, reflecting a 20% YoY growth.

In the third quarter, Alkermes generated revenues of $16.3 million from R&D (research and development) collaborations. Those revenues include $15.7 million from Biogen (BIIB) for an R&D collaboration related to BIIB098 (diroximel fumarate), an investigational drug.

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Product revenue trends

In the third quarter, Alkermes’s (ALKS) Vivitrol and Aristada generated revenues of $79.9 million and $36.1 million, respectively. That compares to $69.2 million and $24.5 million, respectively, in the third quarter of 2017 and ~15% and ~48% YoY growth, respectively.

Peer comparisons

Alkermes’s peers in the biopharmaceuticals market include Ionis Pharmaceuticals (IONS), Regeneron Pharmaceuticals (REGN), and Neurocrine Biosciences (NBIX). They reported revenues of $117.75 million, $1.6 billion, and $96.91 million, respectively, in the second quarter of 2018. Ionis Pharmaceuticals and Neurocrine Biosciences had ~13.05% and ~9.38% YoY growth, respectively. Neurocrine Biosciences’ net revenues grew from $6.3 million in the second quarter of 2017 to $96.91 million in the second quarter of 2018.

Wall Street analysts anticipate that in the third quarter, Ionis Pharmaceuticals, Regeneron Pharmaceuticals, and Neurocrine Biosciences will have revenues of $152.68 million, $1.6 billion, and $151.83, respectively. That represents YoY growth of ~26.28%, ~9.39%, and ~150%, respectively.

The revenue growth of Alkermes, Ionis Pharmaceuticals (IONS), Regeneron Pharmaceuticals (REGN), and Neurocrine Biosciences (NBIX) could boost the First Trust NYSE Arca Biotechnology Index Fund (FBT). They make up ~3.38%, ~3.82%, ~3.75%, and ~3.73%, respectively, of FBT’s total portfolio holdings.

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