Biopharmaceutical company Alkermes (NASDAQ: ALKS) reported a 72% rise in the fiscal 2013 second-quarter revenue compared to the corresponding period of fiscal 2012. For the second quarter, Alkermes reported a net loss that narrowed from the similar period of fiscal 2012. The company improved its fiscal 2013 full year revenue and earnings guidance.
The Ireland-based Alkermes is involved in the development of medicine that enhances patient outcomes. The company offers medicines for schizophrenia, bipolar I disorder, multiple sclerosis, type II diabetes, muscle spasticity, nausea associated with chemotherapy and surgery, severe pain, attention deficit and hyperactivity disorder. The company gets royalty payments for the antipsychotic drugs Risperdal Consta and Invega Sustenna. Additionally, Alkermes currently has drug candidates in various stages of trial for the treatment of schizophrenia, opioid-induced constipation, depressive disorder, cocaine dependence and pain relief.
Total revenues for the fiscal 2013 second quarter increased to $123.98 million from $71.98 million in the similar period of fiscal 2012. The average street estimate was $121.62 million for the second quarter of fiscal 2013.
GAAP net loss for the quarter narrowed to $16.71 million, or $0.13 per share, from $22.26 million, or $0.22 per share, in the second quarter of fiscal 2012. Alkermes incurred a one-time charge of $12.1 million related to the refinancing of the company’s debt in September 2012.
Excluding charges, non-GAAP net income for the second quarter of fiscal 2013 was $23.7 million, or $0.17 per share. The non-GAAP net income for the second quarter of fiscal 2012 was $7.1 million, or $0.07 per share. The EPS estimate of analysts was $0.11 per share for the reported quarter.
Over the past six months, the price action at Alkermes counter reflected the launch or outcome of the clinical trials. Earlier in December 2011, the company launched a Phase 3 clinical trial of the drug candidate ALKS 9070 for potential treatment of schizophrenia. The share price of Alkermes spiraled upwards from $15.78 on December 19 to $17.68 in less than 10 days. In the first week of January, Alkermes stated that it would accelerate testing the experimental drug candidate ALKS 5461 for depression. The announcement invoked buying interest that lead the share price to $18.60 on January 18. The upward price action continued in the final week of January when Alkermes received FDA approval for the diabetes drug Bydureon. Aided by the fiscal 2012 third-quarter results that beat estimates, Alkermes had touched a peak of $19.50 per share by the first week of February.
On May 17, Alkermes reported a widened fiscal 2012 fourth-quarter loss primarily due to the acquisition of Elan Corp PLC’s drug technology unit. The declared loss triggered a sell-off resulting in a decline in the share price to $15.16 on June 7. The initiation of a Phase 3 clinical research program for Invega Sustenna started a trend reversal from June 12 leading to $17.88 per share by July 3. A rating upgrade from “neutral” to “outperform” by Zacks Equity Research on July 10 initiated a rally that took the stock price to $19.53 on July 27.
Encouraged by the narrowed loss and raised full-year 2013 guidance, the share price of Alkermes opened on a positive note on Thursday, November 1, and spiked 5% to $19.44 before falling back to the opening level of $18.81 per share. However, the strong upward momentum pushed the price back to the $19.00 level. For the rest of the day, the share price was oscillating at around $19.00.
For the full-year 2013, Alkermes now expects to report revenues in the range of $510 million to $540 million, up from the previously issued guidance range of $490 million to $530 million. The company also anticipates a narrowed GAAP net loss between break-even and $15 million compared to a GAAP net loss in the range of $20 million to $30 million expected previously. Accordingly, the GAAP net loss per share now expected is in the range of $0.00 to $0.11 per share compared to the previously issued net loss guidance range of $0.15 to $0.30 per share.
Alkermes also raised the non-GAAP income guidance for the fiscal 2013 full year. The non-GAAP net income expected for 2013 is now raised to the range of $120 million to $140 million from the range of $95 million to $115 million anticipated earlier on. This newly issued non-GAAP net income guidance converts to EPS in the range of $0.88 to $1.02 compared to the previously issued guidance range of $0.69 to $0.84 per share.
Commenting on the results, CFO James Frates of Alkermes stated, “Our second fiscal quarter results clearly demonstrate the financial strength and growth potential that we envisioned when we created Alkermes plc. Our key commercial product portfolio generated strong revenues this quarter, and we are positioned for record financial results this fiscal year.”
Alkermes ended the trading day on November 1 at $19.50 per share, up $0.98 or 5.3% on a volume of 1.35 million shares.
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