Alkermes (ALKS 1.01%), an Ireland-based biopharmaceutical company known for its focus on neuroscience and oncology therapeutics, released its third-quarter 2024 earnings on Oct. 24. The key highlight from the release was the year-over-year growth in its proprietary product sales, despite a slight drop in overall revenue to $378.1 million compared to $380.9 million in the prior-year period, mainly due to lower manufacturing and royalty revenues. However, proprietary net sales leaped 18% to $273.0 million, underscoring the strength in Alkermes' core offerings. The quarter was overall solid, buoyed by marginally improved GAAP net income from continuing operations of $92.8 million.
| Metric | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Total revenue | $378.1 million | $380.9 million | (0.7%) |
| Proprietary net sales | $273.0 million | $231.8 million | 18% |
| Vivitrol net sales | $113.7 million | $99.3 million | 14.5% |
| Lybalvi net sales | $74.7 million | $50.7 million | 47.3% |
| GAAP net income from continuing operations | $92.8 million | $91.6 million | 1.3% |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview
Alkermes is a biopharmaceutical company primarily involved in developing treatments for central nervous system disorders. Its current lineup includes schizophrenia treatment Aristada, antipsychotic drug Lybalvi, and alcohol and opioid dependence treatment Vivitrol. The company has been working on several strategic fronts, including bolstering its pipeline and divesting itself of non-core assets as it focuses on its key therapeutic areas.
Its recent strategies have emphasized expanding its market share in the treatment of schizophrenia and bipolar disorders, as well as advancing its pipeline with novel drug candidates like ALKS 2680, a potential narcolepsy treatment. Key success factors include innovation within drug development, effective exploitation of its intellectual property, and strategic partnerships that bolster commercial opportunities.
Quarterly Performance Highlights
During the quarter, Alkermes saw strong organic growth in its proprietary product sales, which increased by 18% year-over-year. Vivitrol's revenue growth of 14% to $113.7 million was propelled by increased demand for alcohol-dependence treatments.
Lybalvi performed exceptionally well, with a 47% revenue increase to $74.7 million. This surge signifies growing market acceptance of the drug, and underscores the importance of expanding indications for bipolar disorder and schizophrenia. Moreover, Aristada's 3.5% revenue increase to $84.7 million points to sustained demand for long-acting antipsychotic therapies.
Despite all this, total revenues declined slightly to $378.1 million, a slide that management attributed to a decrease in manufacturing and royalty revenues. This reflects a broader industry trend around external collaborations. In response, Alkermes continues to prioritize cost-management strategies, trimming both its selling, general, and administrative (SG&A) and research and development (R&D) spending.
Strategically, Alkermes' divestiture of its oncology business was noteworthy. That move was intended to sharpen the company's focus on neuroscience and other high-impact drug markets. Furthermore, the implementation of a share repurchase program earlier this year exemplifies Alkermes' commitment to enhancing shareholder value through surplus cash utilization.
Looking Ahead
In the report, Alkermes reiterated the full-year guidance it first offered in February, reflecting confidence in its diversified product pipeline and strategic orientation. Management anticipates sustained demand for its core products and is cautiously optimistic given the current industry dynamics.
It remains committed to managing operational costs effectively, with a strategy focused on maximizing profitability while advancing its R&D pipeline.
