Yahoo Finance Why Is Alkermes (ALKS) Down 2.7% Since Last Earnings Report?
A month has gone by since the last earnings report for Alkermes (ALKS). Shares have lost about 2.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Alkermes due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Alkermes' Q1 Earnings & Revenues Fall Shy of Estimates
Alkermes reported adjusted earnings from continuing operations of 44 cents per share for first-quarter 2024, which missed the Zacks Consensus Estimate of 59 cents. The company had reported adjusted earnings of 18 per share in the year-ago quarter.
Alkermes’ revenues of $350.4 million rose 21.8% from the year-ago quarter’s level owing to the strong performance of its proprietary products. The top line, however, missed the Zacks Consensus Estimate of $360 million.
Quarter in Detail
Alkermes derives revenues from the net sales of its proprietary products — Vivitrol, Aristada, and Lybalvi — and manufacturing and/or royalty revenues on net sales of products commercialized by its partners.
Sales of the proprietary drug, Vivitrol, increased around 1% year over year to $97.7 million due to stability in the alcohol dependence indication. The figure missed the Zacks Consensus Estimate of $99 million and our model estimate of $102.6 million.
Aristada sales decreased 1.5% year over year to $78.9 million, owing to a substantial decline in channel inventory. The figure missed the Zacks Consensus Estimate of $81 million and our model estimate of $84.4 million.
Lybalvi generated sales of $57 million, up 50% year over year, primarily driven by growth in demand. Lybalvi's sales came in slightly ahead of the Zacks Consensus Estimate as well as our model estimate of $56.7 million.
Total manufacturing and royalty revenues increased 60.4% year over year to $116.8 million, owing to the reinstatement of royalties on sales of long-acting Invega products in the United States.
Manufacturing and royalty revenues from Biogen’s multiple sclerosis drug, Vumerity, were up 8.3% year over year to $31.3 million. Royalty revenues from Invega products were $62.7 million in the first quarter compared with $13.6 million reported in the year-ago quarter.
Research and development expenses totaled $67.6 million, up almost 6% year over year, driven by higher investments in the pipeline development program related to ALKS 2680.
Selling, general and administrative expenses totaled $179.7 million, up 7.1% year over year, owing to continued investment for the launch of Lybalvi.
As of Mar 31, 2024, Alkermes had cash and cash equivalents of $807.8 million compared with $813.4 million as of Dec 31, 2023.
2024 Guidance
Alkermes reiterated the revenue guidance it provided earlier this year.
The company continues to expect total revenues in the band of $1.5-$1.6 billion for 2024.
Net sales for Vivitrol are expected to be in the range of $410-$430 million. Aristada sales are anticipated in the band of $340-$360 million. Lybalvi’s net sales are expected in the $275-$295 million range.
Research and development expenses are anticipated in the band of $225-$255 million. Selling, general and administrative expenses are projected in the range of $625-$655 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Alkermes has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Alkermes has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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