AMLN Amylin Pharmaceuticals, Inc. (MM)

Alkermes plc (ALKS) reported earnings of 28 cents per share (including depreciation and stock-based compensation expenses) in the first-quarter of fiscal 2013 (ended June 30, 2012). The Zacks Consensus Estimate was 10 cents per share.

This was the third full quarter following the purchase of Elan Corporation’s (ELN) drug delivery unit, Elan Drug Technologies (EDT). We remind investors that Alkermes purchased the EDT unit in September 2011.

Alkermes suffered a loss of 4 cents per share in the year-ago quarter. However, results of the year-ago quarter only comprised figures from the standalone Alkermes. The company, prior to the purchase of the EDT unit, was headquartered in Cambridge, Massachusetts. However, the company shifted its base to Dublin, Ireland, post-merger.

Quarterly Results

Total revenue for the first quarter of fiscal 2013 jumped 146% to $152.2 million. The massive jump was attributable to the 182.8% rise in manufacturing and royalty revenues due to the expanded product portfolio following the purchase of the EDT unit. Revenues surpassed the Zacks Consensus Estimate of $127.0 million.

In the reported quarter, Alkermes recorded $47.9 million as manufacturing and royalty revenues from its long-acting atypical antipsychotic franchise comprising Risperdal Consta and Invega Sustenna/Xeplion. These schizophrenia drugs are marketed by Johnson & Johnson (JNJ). Alkermes recorded manufacturing and royalty revenues from Ampyra/Fampyra, marketed for improving walking ability in multiple sclerosis patients, were $17.1 million in the reported quarter.

Alkermes earned $3 million in royalty revenues from type II diabetes treatment Bydureon. Alkermes co-promotes the drug with Amylin Pharmaceuticals (AMLN).

Vivitrol, a legacy Alkermes product, performed well in the first quarter of fiscal 2013. Sales of the product climbed approximately 27.8% year over year to $12.4 million. This was the 12th consecutive quarter in which the product exhibited growth.

During the quarter, Alkermes also earned revenues from its legacy products, Tricor 145 ($12 million); Ritalan LA/Focalin XR franchise ($10.9 million) and Verelan ($6 million).

Research and development (R&D) revenue from collaborations came in at $1.5 million in the first quarter of fiscal 2013 as opposed to $3.3 million a year ago.

Total expenses at Alkermes (excluding amortization of acquired intangible assets) climbed 44.7% to $109.7 million. The increase was primarily attributable to the rise in research and development expenses following the merger.

Fiscal 2013 Projection Backed

Alkermes reaffirmed its outlook for fiscal 2013. The company continues to expect revenues in the range $490-$530 million. The Zacks Consensus Estimate of $511 million is well within the company’s guidance range.

Alkermes continues to expect adjusted earnings in fiscal 2013 in the range of 62 cents-77 cents per share. The Zacks Consensus Estimate is 24 cents per share for fiscal 2013.

Our Recommendation

Currently, we have an Outperform recommendation on Alkermes in the long run. The company carries a Zacks #2 Rank (Buy rating) in the short run.

 
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