Alkermes' loss deepens in FY 2011 but firm upbeat on revs and EDT plans

Alkermes saw losses increase in fiscal 2011 but has issued an upbeat outlook on higher revenues, portfolio expansion and impending acquisition of Elan Drug Technologies (EDT).

The US drug delivery technology firm’s GAAP net deficit for the 12-months ended March 31, 2011 was $45.5m (€31.6m), an increase of some 18 per cent on the previous financial year.

However, according to comments made by CFO James Frates during Alkermes’ webcast, the loss was due primarily to financial moves the firm made to position itself for expansion.

Back in July 2010 we used $46m to redeem in full our non-recourse seven per cent notes, “Frates explained, adding that this had made Alkermes debt-free and “will assist us in securing favourable financial terms for the proposed merger with EDT.”

Revenues up on Risperdal gains

Alkermes’ total revenues for fiscal 2011 were $186.6mm, up from $178 the previous year as a result of gains made in its manufacturing business and higher royalties.

The biggest contribution was made by Risperdal Costa that Alkermes makes for Johnson & Johnson’s (J&J) Janssen unit. Combined manufacturing and royalty revenues for the product, an atypical antipsychotic, were $154.3m, up 5 per cent from $145m.

Alkermes’ second biggest earner over the year was Vivitrol, an alcohol dependence treatment that has also been cleared for opioid dependence in the US. The drug generated net revenue of $28.9m, up around $9m.

In contrast, revenue from the formulation polymer Alkemes makes for Amylin’s candidate long-acting diabetes treatment Bydueron fell to $100,000 from just over $500,000 in the financial year 2010.

Johnson & Johnson importance

The results firmly establish the importance of Alkermes’ relationship with J&J which, according to comments by CEO Richard Pops, is something that is likely to continue when the acquisition of EDT is completed.

Speaking yesterday Pops said that, in addition to other candidate drugs in EDT’s portfolio, one of the highlights of the acquisition will be the inclusion of revenues from Invega Sustenna, which is also sold by J&J.

He predicted that: “The addition of Sustenna, a complementary product to Consta, will position Alkermes Plc as the clear leader in the space and remove any concerns about the positioning of the two products in markets around the world.

For fiscal 2012 Alkermes expects total revenues to be in the $205m to $229m range, with its manufacturing business contributing between $121m and $127 and royalties brining in $37m to $35m.

The firm expects to see a net loss for 2012 of between $35m to 45m, the top end of which is comparable to the deficit it posted for 2011.