Release Date: July 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 total revenues of $399.1 million for Q2 2024, driven by a 16% year-over-year growth in their proprietary product portfolio.
- LYBALVI net sales grew significantly by 52% year-over-year to $71.4 million, reflecting strong underlying demand.
- The company ended the second quarter with a strong financial position, holding $962.5 million in cash and total investments.
- Alkermes PLC (ALKS) completed the sale of their Athlone, Ireland manufacturing facility, receiving approximately $91 million, which aligns with their strategy to drive operational efficiency.
- The company repurchased approximately 3.5 million shares during the quarter for an aggregate purchase price of $84.7 million, as part of their $400 million share repurchase program.
Negative Points
- Revenues from the long-acting INVEGA products dropped significantly to $78.7 million from $321.2 million in Q2 last year, due to the end of royalties and net sales of INVEGA SUSTENNA in the US.
- The company expects a $20 million impact on their third-quarter results due to the end of INVEGA SUSTENNA royalties and net sales in the US.
- R&D expenses were $59.6 million, reflecting focused investments in neuroscience development programs, which may indicate high ongoing costs.
- SG&A expenses, although decreased from last year, were still high at $168.1 million, driven by operational efficiencies and non-recurring expenses.
- The long-acting antipsychotic market experienced some softness, which could impact future sales of the ARISTADA product family.
Q & A Highlights
Q: How are you thinking about the M&A priorities and the types of assets you're considering? Are they more on the pipeline side or something that could add to EPS or profitability in short order?
A: Richard Pops, CEO: Our M&A priorities are consistent quarter to quarter. We are interested in both EPS augmentation through commercial products that would drop profits to the bottom line, as well as expanding the pipeline. We aim to have a robust, growing top line, strong profitability, and an expanded pipeline in the future.
Q: Can you give us a sense of timing to data with Vibrance-1?
A: Richard Pops, CEO: The primary focus right now is site activation. We will be activating sites all through the summer into the fall. It's too early to extrapolate the enrollment curve, but we will provide better visibility as we progress.
Q: Can you talk about the potential impact of new contracts coming online July 1 for LYBALVI?
A: Todd Nichols, Chief Commercial Officer: Since the beginning of the year, we've added approximately 50 million additional lives. It can take several quarters for these contracts to flow through to the planned sponsors. Our full-year range already anticipates some movement in our contracting strategy.
Q: How are you thinking about commercial spend for LYBALVI as we move into '25?
A: Todd Nichols, Chief Commercial Officer: We are focused on driving HCP adoption, building patient awareness, and optimizing the access profile. We think our current spend is appropriate, but we could add additional spend in '25 depending on market dynamics.
Q: What trends have you been seeing in the split of scripts between bipolar versus schizophrenia for LYBALVI?
A: Blair Jackson, COO: The split has been relatively stable, with approximately 50:50 between schizophrenia and bipolar. However, new patient starts are showing a leading indicator with bipolar, representing about 57% of new prescriptions.
Q: Was there an inventory benefit for ARISTADA in the quarter?
A: Blair Jackson, COO: Yes, we saw a rebound in ARISTADA inventory in Q2, with a net effect of $2 million across the quarters.
Q: How do you see the competitive landscape for orexin agonists playing out?
A: Richard Pops, CEO: We believe there is an early mover advantage. The chemistry space is limited, and not many companies have data showing they will be meaningful competitors. We aim to move quickly and cover as much of the market as possible.
Q: Can you talk about the impact of Medicaid disenrollment on VIVITROL?
A: Blair Jackson, COO: We monitor Medicaid enrollment closely and have not seen any reduction in Medicaid claims across our product portfolio.
Q: How are you thinking about the potential to move into idiopathic hypersomnia (IH) with your orexin program?
A: Richard Pops, CEO: We are actively reconsidering our strategy for IH. We believe IH is a separate opportunity from narcolepsy and plan to explore it further with our follow-on molecules.
Q: How are you thinking about the size and scale of potential M&A transactions?
A: Richard Pops, CEO: We are interested in assets that may not be major commercial products but would drop a lot to our bottom line and fit logically within our specialized commercial infrastructure. We are not looking at large merger of equal type transactions at the moment.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
