Alkermes Inc.’s (ALKS) third quarter fiscal 2011 net loss (excluding special items but including stock-based compensation expense) of $0.12 per share compared unfavorably with the year-ago loss of $0.03 per share. The Zacks Consensus Estimate was a loss of $0.15 per share. The wider year over year loss was attributable to lower revenues and higher expenses incurred in the reported quarter.
Total revenues for the reported quarter fell marginally (0.4%) to approximately $44.0 million. Revenues for the reported quarter surpassed the Zacks Consensus Estimate of $43 million.
Alkermes generated $25.5 million from manufacturing Risperdal Consta, approved for treating schizophrenia and bipolar disorder, in the reported quarter as against $27.2 million a year ago. Risperdal Consta is marketed worldwide by Johnson & Johnson (JNJ) and manufactured by Alkermes. Moreover, Alkermes derived $0.6 million in manufacturing revenues from diabetes candidate Bydureon and $0.1 million related to Vivitrol in the third quarter of fiscal 2011. Alkermes derived $1.5 million in manufacturing revenues from Bydureon in the comparable period of fiscal 2010.
Alkermes generated $9.8 million in royalty revenues during the reported quarter on global sales of $387.8 million for Risperdal Consta as opposed to $10 million on $398.7 million global sales of the drug in the third quarter of fiscal 2010.
The other approved product at Alkermes is Vivitrol. The label of the drug, originally approved for the treatment of alcohol dependence, was expanded in October 2010 to prevent the relapse of opioid dependence, following opioid detoxification. Sales of the product climbed 40% to $7.7 million in the most recent quarter. Research and development (R&D) revenue from collaborations went up to $0.3 million in the reported quarter from $0.1 million in the third quarter of fiscal 2010.
Total expenses at Alkermes climbed 10.9% to $55.9 million. R&D expenses for the third quarter of fiscal 2011 came more or less flat at $22.5 million. Selling, general and administrative expenses increased 15.7% to $20.5 million in the reported quarter.
View Adjusted
Apart from disclosing financial results, Alkermes also provided a projection for fiscal 2011. Alkermes projects fiscal 2011 revenues between $172 million and $186 million as opposed to the previously projected range of $161 million to $180 million. The revised projection is based on higher expected sales of Risperdal Consta. Alkermes expects to incur loss between $42 million and $57 million as opposed to the previous projection of loss between $53 million and $68 million.
Our Recommendation
Currently we have a long-term ‘Neutral’ stance on Alkermes which is supported by the Zacks #3 Rank (short-term ‘Hold’ rating) carried by the company.
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