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Alkermes (ALKS) Q4 Loss Narrower than Expectations, Sales Beat

Zacks

Alkermes plc ALKS reported loss of 4 cents per share (including the impact of share-based compensation expense) in the fourth quarter of 2016, narrower than the Zacks Consensus Estimate of a loss of 19 cents. The reported loss was, however, narrower than the year-ago loss of 34 cents.

Alkermes reported revenues of $213.5 million in the fourth quarter of 2016, up 30.9% year over year. Revenues surpassed the Zacks Consensus Estimate of $202.25 million.

Alkermes’ share price increased 2.3% year- to -date compared with the Zacks classified Medical – Biomedical and Genetics industry’s gain of 5.3%.


Vivitrol & Aristada in Focus

Manufacturing and royalty revenues declined 12.1% year over year to $133.8 million. Manufacturing and royalty revenues from Risperdal Consta, Invega Sustenna/Xeplion and Invega Trinza/Trevicta were up 1.5% to $74 million. Manufacturing and royalty revenues from Ampyra/Fampyra, rose 69% to $32.3 million, in the quarter.

The company earned royalty revenues of $11.3 million on Bydureon, down 7.4%.

Vivitrol sales surged 62% year over year to $62.1 million.

Aristada sales came in at $17.3 million, up considerably by 276.1% from the fourth quarter of 2015 which was the year of launch.

2016 Update

For full year 2016, loss per share was 7 cents compared with loss of 38 cents in 2015.

For the year revenues increased 19% to $745.7 million.

2017 Outlook

Alkermes expects total revenues to be in the range of $870 million to $920 million, a 17% to 23% increase from 2016, driven by continuing growth of Vivitrol and Aristada. Alkermes expects Vivitrol net sales in the range of $280 million to $300 million.

For 2017, the earnings per share is estimated in the range of -$0.10-$0.10.

Pipeline Update

Alkermes plans to submit a new drug application (NDA) for ALKS 5461 in major depressive disorder, expects to complete the pivotal efficacy study of ALKS 3831 in schizophrenia, and complete the required elements for registration of ALKS 8700 in multiple sclerosis.

Our Take

Alkermes’ loss was narrower and revenues surpassed expectations in the fourth quarter of 2016.. However, revenues were driven by encouraging performance of Vivitrol and Aristada. The company continues to expect Vivitrol and Aristada as long-term growth drivers.

For Aristada, the company expects approval and launch of the two-month dose mid-year, which will be the only two-month option available in the long-acting injectable antipsychotic market. This in turn should boost sales further On the other hand, the company’s progress with its pipeline is impressive. Going forward, focus should remain on the same as important updates.

Zacks Rank & Stocks to Consider

Alkermes is a Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the health care sector include Sunesis Pharmaceuticals SNSS, Exact Sciences Corporation EXAS, and GlaxoSmithKline plc GSK. While Sunesis carries a Zacks Rank#1 (Strong Buy), Exact Sciences and GlaxoSmithKline carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Sunesis’ loss estimates narrowed by 5.06% and 8.80% for 2016 and 2017, respectively, over the past 30 days. The company recorded a positive earnings surprise in three of the last four quarters, the average being 0.54%.

GlaxoSmithKline’s earnings estimates increased from $2.71 to $2.72 for 2017 and from $2.80 to $2.85 for 2018 over the last 7 days. The company posted a positive earnings surprise in three of the four trailing quarters with an average beat of 11.03%. Its share price increased 5.3% year to date.

Exact Sciences’ loss estimates narrowed by 0.58% and 1.43% for 2016 and 2017, respectively, over the past 30 days. The company recorded a positive earnings surprise in all of the last four quarters, the average being 14.12%.

Alkermes PLC Price, Consensus and EPS Surprise

Alkermes PLC Price, Consensus and EPS Surprise | Alkermes PLC Quote

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