— Alkermes Emerges as Pure-Play, Profitable
Neuroscience Company —
— Alkermes Provides Updated Financial
Expectations for 2023 —
DUBLIN, Nov. 15,
2023 /PRNewswire/ -- Alkermes plc (Nasdaq: ALKS)
today announced that it has completed the separation of its
oncology business into Mural Oncology plc (Mural Oncology), a new,
independent, publicly traded company. Alkermes is now a pure-play,
profitable neuroscience company that will continue its work to
develop innovative medicines for people living with
difficult-to-treat psychiatric and neurological disorders. Mural
Oncology will begin "regular way" trading on the Nasdaq Global
Market under the stock ticker symbol "MURA" on Nov. 16, 2023. Alkermes will continue to trade
under the Nasdaq ticker symbol "ALKS."
"The separation of our oncology business was an important
element of our strategy to transform Alkermes into a pure-play
neuroscience company with the potential to generate strong
profitability and cash flow. With a topline driven by the growth of
our proprietary commercial products, proven drug development
capabilities, and an important pipeline opportunity in our ALKS
2680 orexin program, we believe we are well positioned to drive
value for Alkermes shareholders," said Richard Pops, Chief
Executive Officer of Alkermes.
Updated Financial Expectations for 2023
Alkermes is
providing the following updated financial expectations for 2023.
These improved expectations reflect the company's year-to-date
financial results through Sept. 30,
2023 and the completion of the separation of the oncology
business. The separation is associated with an anticipated
reduction in operating expenses of approximately $20 million during the last six weeks of 2023,
primarily consisting of Research and Development expenses.
- Net income according to generally accepted accounting
principles in the U.S. (GAAP) is now expected to be in the range of
$250 million to $280 million, revised from the prior expectation
of $225 million to $265 million. GAAP earnings per share
(diluted)+ are now expected to be in the range of
$1.46 to $1.63, revised from the prior expectation of
$1.31 to $1.54.
- Non-GAAP net income is now expected to be in the range of
$270 million to $300 million, revised from the prior expectation
of $230 million to $270 million. Non-GAAP earnings per share
(diluted)+ are now expected to be in the range of
$1.57 to $1.75, revised from the prior expectation of
$1.34 to $1.57.
+2023 per share expectations are calculated based on
a weighted average basic share count of approximately 166.5 million
shares outstanding and a weighted average diluted share count of
approximately 171.5 million shares outstanding.
At Sept. 30, 2023, Alkermes
recorded cash, cash equivalents and total investments of
$995.6 million. In connection with
the completion of the separation, Alkermes capitalized Mural
Oncology with cash of $275
million.
Upon completion of the separation, each of Alkermes'
shareholders received a distribution of one ordinary share of Mural
Oncology for every 10 ordinary shares of Alkermes held as of the
close of business on Nov. 6, 2023,
the record date for the distribution. Cash will be delivered
in lieu of any fractional ordinary shares of Mural Oncology.
The separation and distribution have been structured to qualify
as a tax-free distribution (except for cash received in lieu of
fractional shares) to Alkermes' shareholders and the company and
its affiliates for U.S. federal income tax purposes. Alkermes'
shareholders are urged to consult with their tax advisors with
respect to the U.S. federal, state, local and foreign tax
consequences of the separation.
Morgan Stanley & Co. LLC and BofA Securities, Inc. served as
financial advisers to Alkermes, and Goodwin Procter LLP and Arthur
Cox LLP served as its legal counsel.
About Alkermes plc
Alkermes plc is a global
biopharmaceutical company that seeks to develop innovative
medicines in the field of neuroscience. The company has a portfolio
of proprietary commercial products for the treatment of alcohol
dependence, opioid dependence, schizophrenia and bipolar I disorder
and a pipeline of clinical and preclinical candidates in
development for neurological disorders. Headquartered in
Dublin, Ireland, Alkermes has a
research and development center in Waltham, Massachusetts; a research and
manufacturing facility in Athlone, Ireland; and a manufacturing facility in
Wilmington, Ohio. For more
information, please visit Alkermes' website at
www.alkermes.com.
Non-GAAP Financial Measures
This press release
includes information about certain financial measures that are not
prepared in accordance with GAAP, including non-GAAP net income and
non-GAAP diluted earnings per share. These non-GAAP measures are
not based on any standardized methodology prescribed by GAAP and
are not necessarily comparable to similar measures presented by
other companies.
Non-GAAP net income adjusts for certain one-time and non-cash
charges by excluding from GAAP results: share-based compensation
expense; amortization; depreciation; non-cash net interest expense;
change in the fair value of contingent consideration; certain other
one-time or non-cash items; and the income tax effect of these
reconciling items.
The company's management and board of directors utilize these
non-GAAP financial measures to evaluate the company's performance.
The company provides these non-GAAP financial measures of the
company's performance to investors because management believes that
these non-GAAP financial measures, when viewed with the company's
results under GAAP and the accompanying reconciliations, are useful
in identifying underlying trends in ongoing operations. However,
non-GAAP net income and non-GAAP diluted earnings per share are not
measures of financial performance under GAAP and, accordingly,
should not be considered as alternatives to GAAP measures as
indicators of operating performance. Further, non-GAAP net income
and non-GAAP diluted earnings per share should not be considered
measures of the company's liquidity.
A reconciliation of GAAP to non-GAAP financial measures has been
provided in the tables included in this press release.
Note Regarding Forward-Looking Statements
Certain statements set forth in this press release constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, as amended, including,
but not limited to, statements concerning: the company's separation
of its oncology business, including the expected benefits and
cost savings related to the separation and the anticipated tax-free
nature of the separation; the company's expectations concerning its
business and future financial and operating performance, business
plans or prospects, including its expectations regarding
profitability and its ability to drive shareholder value; and the
therapeutic and commercial potential of the company's products and
development candidates. The company cautions that forward-looking
statements are inherently uncertain. The forward-looking statements
are neither promises nor guarantees and they are necessarily
subject to a high degree of uncertainty and risk. Actual
performance and results may differ materially from those expressed
or implied in the forward-looking statements due to various risks
and uncertainties. These risks and uncertainties include, among
others: the company may not realize the anticipated benefits of the
separation of its oncology business; the separation may not be
deemed to be tax-free; the unfavorable outcome of arbitration or
litigation, including so-called "Paragraph IV" litigation and
other patent litigation which may lead to competition from generic
drug manufacturers, or other disputes related to the company's
products or products using the company's proprietary technologies;
clinical development activities may not be completed on time or at
all; the results of the company's development activities may not be
positive, or predictive of future results from such activities,
results of future development activities or real-world results;
the United States (U.S.) Food and
Drug Administration (FDA) or regulatory authorities outside
the U.S. may not agree with the company's regulatory
approval strategies or components of the company's marketing
applications; the FDA or regulatory authorities outside
the U.S. may make adverse decisions regarding the
company's products; the company and its licensees may not be able
to continue to successfully commercialize their products or support
revenue growth from such products; there may be a reduction in
payment rate or reimbursement for the company's products or an
increase in the company's financial obligations to government
payers; the company's products may prove difficult to manufacture,
be precluded from commercialization by the proprietary rights of
third parties, or have unintended side effects, adverse reactions
or incidents of misuse; and those risks and uncertainties described
under the heading "Risk Factors" in the company's Annual Report on
Form 10-K and in subsequent filings made by the company with the
U.S. Securities and Exchange Commission (SEC), which are available
on the SEC's website at www.sec.gov. Existing and prospective
investors are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
Except as required by law, the company disclaims any intention or
responsibility for updating or revising any forward-looking
statements contained in this press release.
Alkermes plc and
Subsidiaries
|
2023 Guidance — GAAP
to Non-GAAP Adjustments
|
|
|
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|
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An itemized
reconciliation between projected earnings per share on a GAAP basis
and projected earnings per share on a non-GAAP basis is as
follows:
|
|
|
|
|
|
|
|
|
(In millions, except
per share data)
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|
Amount
|
|
Shares
|
|
Earnings
Per Share
|
|
Projected Net Income —
GAAP
|
|
$
265.0
|
|
171.5
|
|
$
1.55
|
|
Adjustments:
|
|
|
|
|
|
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Share-based
compensation expense
|
|
97.5
|
|
|
|
|
|
Depreciation
expense
|
|
42.5
|
|
|
|
|
|
Amortization
expense
|
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35.0
|
|
|
|
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|
Separation
expense
|
|
32.0
|
|
|
|
|
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Restructuring
|
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6.0
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Income tax effect
related to reconciling items
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3.5
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|
|
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Non-cash net interest
expense
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|
0.5
|
|
|
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Royalties and interest
related to 2022*
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(197.0)
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|
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Projected Net Income —
Non-GAAP
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$
285.0
|
|
171.5
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$
1.66
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Projected GAAP and
non-GAAP measures reflect mid-points within ranges of estimated
guidance.
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* Pursuant to final
award related to arbitration proceedings with Janssen Pharmaceutica
N.V.
|
Alkermes Contacts:
For Investors: Sandy Coombs +1 781 609
6377
For Media: Katie Joyce
+1 301 325 3803
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SOURCE Alkermes plc