A month has gone by since the last earnings report for Alkermes (ALKS). Shares have lost about 1.4% in that time frame, outperforming 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 drivers.
Alkermes’ Q1 Earnings Beat Estimates, Revenues Rise Y/Y
Alkermes reported first-quarter 2022 adjusted earnings of 12 cents per share, which beat the Zacks Consensus Estimate of 1 cent. The company had reported adjusted earnings of 11 cents per share in the year-ago quarter.
The company’s revenues of $278.5 million increased 10.8% from the year-ago quarter. The top line also beat the Zacks Consensus Estimate of $262 million.
Quarter in Detail
Total manufacturing and royalty revenues were down 12.2% year over year to $105.2 million due to partial termination of the license agreement related to sales of long-acting Invega products in the United States by Janssen, a subsidiary of J&J.
Sales of proprietary drug, Vivitrol (for alcohol and opioid dependence), increased approximately 14% year over year to $84.9 million, while the same for Aristada (for schizophrenia) increased approximately 31% year over year to $72.5 million. These increases were driven by the underlying unit growth and volume growth.
Vumerity revenues increased around 128% to $30.6 million.
Research and development (R&D) expenses were $96 million, up 4% year over year.
Selling, general and administrative (SG&A) expenses were $145.1 million, up 15.9% year over year.
Newly approved medicine, Lybalvi generated sales worth $13.9 million following its launch in October 2021. Sales of the drug increased 69.5% sequentially.
As of Mar 31, 2022, Alkermes had cash and cash equivalents worth $758.7 million compared with $765.7 million on Dec 31, 2021. Total outstanding debt was $295.2 million as of Mar 31, 2022.
2022 Guidance
Alkermes has reiterated the financial guidance it provided earlier this year.
The company continues to expect total revenues in the range of $1.0 billion to $1.09 billion in 2022.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -6.67% due to these changes.
VGM Scores
At this time, Alkermes has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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 #2 (Buy). We expect an above average return from the stock in the next few months.
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