Alkermes(ALKS) - 2024 Q2 - Quarterly Report

Financial Performance - Net income from continuing operations for Q2 2024 was $94.7 million, down from$279.1 million in Q2 2023, representing a decrease of 66.1%[115] - Product sales increased by $37.8 million in Q2 2024 compared to Q2 2023, indicating a growth in product demand[115] - The company reported a net income of$128.2 million for the six months ended June 30, 2024, compared to $195.2 million in the prior year, indicating a decrease of about 34$256.1 million in Q2 2024 compared to Q2 2023, primarily due to back royalties received in June 2023[116] - Manufacturing and royalty revenues decreased by 66.3% to $129.9 million for the three months ended June 30, 2024, compared to$385.9 million for the same period in 2023[141] - Royalty revenues from long-acting INVEGA products decreased due to a one-time back royalty of $195.4 million received in June 2023, with worldwide net sales of$1,054.0 million for the three months ended June 30, 2024[143] - The company expects a significant decrease in royalty revenues from INVEGA SUSTENNA after August 20, 2024, due to anticipated competition from generic versions[144] - Royalty revenue related to VUMERITY increased by $3.4 million and$6.4 million during the three and six months ended June 30, 2024, respectively, due to increased end-market net sales[145] Sales and Product Performance - Product sales, net increased by 16.3% to $269.3 million for the three months ended June 30, 2024, compared to$231.5 million for the same period in 2023[139] - VIVITROL product sales, gross increased by 9% and 6% during the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, driven by a 6% increase in units sold and a 3.2% increase in selling price[137] - LYBALVI product sales, gross surged by 57% and 56% during the three and six months ended June 30, 2024, respectively, due to a 52% increase in units sold and a 3.8% increase in selling price[137] Operating Expenses - Operating expenses decreased by $46.9 million in Q2 2024 compared to Q2 2023, driven by reductions in selling, general, and administrative expenses[116] - Selling, general, and administrative expenses decreased to$347.9 million for the six months ended June 30, 2024, from $363.6 million in the same period of 2023, a reduction of$15.7 million[152] - The decrease in general and administrative expenses was primarily due to a reduction in legal expenses by 11.1 million for the six months ended June 30, 2024[154] Research and Development - The company is focused on developing innovative medicines in neuroscience, with significant resources allocated to R&D efforts[133] - Total external R&D expenses for the six months ended June 30, 2024, were 50.6 million, an increase of $5.4 million compared to$45.2 million for the same period in 2023[150] - Internal R&D expenses totaled $76.7 million for the six months ended June 30, 2024, down$10.1 million from $86.8 million in the prior year[150] - ALKS 2680, an investigational treatment for narcolepsy, is currently in a phase 2 study, with plans to initiate a second phase 2 study in Q3 2024[134] - The company expects to initiate phase 2 clinical studies for ALKS 2680 in patients with narcolepsy type 2 in the third quarter of 2024[151] Cash and Liquidity - Cash and cash equivalents totaled$535.2 million as of June 30, 2024, compared to $457.5 million at the end of 2023, indicating improved liquidity[160] - Total cash and investments reached$962.6 million as of June 30, 2024, up from $813.4 million at the end of 2023[160] - Cash generated from operating activities for the six months ended June 30, 2024, was$167.1 million, a decrease from $194.4 million in the same period of 2023, reflecting a decline of approximately 14$535.2 million, down from $665.8 million at the end of June 30, 2023[166] Share Repurchase and Financing - The company repurchased approximately 3.5 million ordinary shares at a total cost of$84.7 million during the three months ended June 30, 2024, with $315.3 million remaining authorized under the Repurchase Program[164] - Cash flows used in financing activities for the six months ended June 30, 2024, included$84.7 million for share repurchases and $29.0 million for employee taxes related to equity awards[170] - The principal balance of borrowings under the 2026 Term Loans was$290.3 million as of June 30, 2024[171] - The company has an incremental facility capacity of $175.0 million under the 2026 Term Loans, subject to meeting certain conditions[162] Interest and Tax - Interest income increased to$20.1 million for the six months ended June 30, 2024, compared to $11.7 million in the prior year, reflecting rising interest rates[155] - The income tax provision for the three months ended June 30, 2024, was$22.1 million, a significant increase of $19.4 million from$2.7 million in the same period of 2023[157] Investments - Available-for-sale investments at June 30, 2024, totaled $427.4 million, with unrealized losses of$1.1 million[161] - The company maintains a diversified investment portfolio to mitigate credit risk, primarily consisting of U.S. government and agency debt securities[163] - Cash flows provided by investing activities for the six months ended June 30, 2024, included proceeds from the sale of the Athlone Facility amounting to approximately $97.9 million[169]