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Alkermes (ALKS)
NASDAQ:ALKS
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Alkermes
(NASDAQ:ALKS)78Outperform
Positive Factors
Financial Performance
Alkermes ended 2024 debt-free with a significant cash reserve of $824.8M, which strengthens its financial position.
Research and Development
Enrollment for ALKS 2680 Phase 2 trials in narcolepsy is progressing well in the US, EU, and Australia, indicating strong development potential.
Negative Factors
Revenue Guidance
The 2025 revenue and EBITDA guidance is below consensus expectations, indicating potential challenges in meeting market predictions.
Alkermes (ALKS) vs. S&P 500 (SPY)
Market Cap
$5.59B
Dividend YieldN/A
Average Volume (3M)1.81M
Price to Earnings (P/E)15.8
Beta (1Y)0.83
Revenue Growth-6.36%
EPS Growth4.57%
CountryUS
Employees1,800
SectorHealthcare
Sector Strength74
IndustryPharmaceuticals
Share Statistics
EPS (TTM)2.18
Shares Outstanding162,614,060
10 Day Avg. Volume1,616,003
30 Day Avg. Volume1,814,357
Financial Highlights & Ratios
PEG Ratio3.45
Price to Book (P/B)N/A
Price to Sales (P/S)3.59
Price to Cash Flow (P/CF)7.30
P/FCF Ratio7.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$38.42Price Target Upside9.02% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
Alkermes Business Overview & Revenue Model
Company DescriptionAlkermes (ALKS) is a fully integrated, global biopharmaceutical company that focuses on developing innovative medicines in the fields of neuroscience and oncology. The company is engaged in the research, development, and commercialization of pharmaceutical products designed to address unmet medical needs. Alkermes' core products include treatments for schizophrenia, bipolar I disorder, and opioid dependence, as well as a pipeline of product candidates in various stages of development.
How the Company Makes MoneyAlkermes makes money primarily through the sales and commercialization of its proprietary pharmaceutical products. The company generates revenue from product sales, which include its marketed medications such as Aristada for schizophrenia and Vivitrol for opioid addiction. Additionally, Alkermes earns income from collaborations and partnerships with other pharmaceutical companies, which may involve licensing agreements, milestone payments, and royalties from the commercialization of partnered products. These collaborations allow Alkermes to leverage its formulation and drug delivery technologies while expanding its market reach. Revenue is also derived from research and development services provided to partners, contributing to the company's earnings.
Alkermes Financial Statement Overview
Summary
Alkermes demonstrates strong operational efficiency and financial stability with commendable profitability metrics and a robust balance sheet. Despite recent revenue fluctuations, the company's focus on cash flow management and low leverage risk supports its financial health.Income Statement
Alkermes shows significant improvement in net profit margin and gross profit margin over the years, with a solid revenue growth rate from 2022 to 2023. The EBIT and EBITDA margins are strong, indicating efficient cost management and operational profitability. However, revenue has declined slightly from 2023 to 2024, which could be a concern if it continues.85
Very Positive
Balance Sheet
The balance sheet is robust with a low debt-to-equity ratio, suggesting financial stability and low leverage risk. The return on equity (ROE) is impressive, reflecting effective use of shareholders' equity to generate profits. The equity ratio is healthy, indicating a strong equity base relative to total assets. However, the decline in cash and cash equivalents from 2023 to 2024 should be monitored.80
Positive
Cash Flow
The company has experienced strong free cash flow growth, particularly from 2022 to 2023. The operating cash flow to net income ratio is favorable, showing efficient cash generation from operations. However, the free cash flow to net income ratio indicates potential volatility, given the fluctuations in free cash flow over the years. Overall, cash flow management appears sound.78
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.17B | 1.56B | 1.66B | 1.11B | 1.17B | 1.04B | Gross Profit |
| 643.87M | 1.31B | 1.41B | 893.69M | 569.84M | 465.85M | EBIT |
| -77.32M | 420.64M | 414.12M | -142.26M | -26.66M | -112.43M | EBITDA |
| -16.12M | 420.64M | 519.48M | 59.77M | 176.40M | -6.02M | Net Income Common Stockholders |
| -94.15M | 367.07M | 355.76M | -158.27M | -48.17M | -110.86M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 751.67M | 751.67M | 773.49M | 740.08M | 765.74M | 659.81M | Total Assets |
| 2.06B | 2.06B | 2.14B | 1.96B | 2.02B | 1.95B | Total Debt |
| 75.54M | 75.54M | 372.19M | 293.27M | 295.80M | 274.96M | Net Debt |
| -215.61M | -215.61M | -85.28M | 797.00K | -41.74M | 2.00M | Total Liabilities |
| 590.59M | 590.59M | 933.54M | 920.23M | 911.90M | 882.75M | Stockholders Equity |
| 1.46B | 1.46B | 1.20B | 1.04B | 1.11B | 1.07B |
| Cash Flow | Free Cash Flow | ||||
| 101.94M | 405.64M | 353.31M | -17.21M | 72.69M | 40.62M | Operating Cash Flow |
| 133.17M | 439.12M | 401.35M | 21.04M | 101.72M | 82.84M | Investing Cash Flow |
| -133.63M | -111.31M | 53.36M | -64.54M | -66.20M | -11.48M | Financing Cash Flow |
| -3.24M | -494.14M | -289.71M | -1.57M | 29.07M | -2.17M |
Alkermes Technical Analysis
Positive
35.24
Price Trends
31.89
Positive
30.35
Positive
28.24
Positive
Market Momentum
0.81
Positive
60.86
Neutral
54.77
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALKS, the sentiment is Positive. The current price of 35.24 is above the 20-day moving average (MA) of 34.69, above the 50-day MA of 31.89, and above the 200-day MA of 28.24, indicating a bullish trend. The MACD of 0.81 indicates Positive momentum. The RSI at 60.86 is Neutral, neither overbought nor oversold. The STOCH value of 54.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALKS.
Alkermes Risk Analysis
Alkermes disclosed 40 risk factors in its most recent earnings report. Alkermes reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Alkermes Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $5.59B | 15.76 | 27.90% | ― | -6.36% | 4.57% | |
78 Outperform | $81.43B | 18.46 | 15.95% | 0.12% | 8.27% | 10.35% | |
77 Outperform | $13.74B | 32.75 | 8.05% | ― | 17.35% | 151.40% | |
69 Neutral | $22.06B | 13.48 | 10.36% | ― | -1.60% | 39.71% | |
68 Neutral | $11.27B | 34.35 | 14.16% | ― | 24.81% | 33.67% | |
64 Neutral | $128.40B | ― | -3.15% | ― | 11.64% | -114.72% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% |
* Healthcare Sector Average
Performance Comparison
ALKS
Alkermes
35.24
6.64
23.22%
BIIB
Biogen
150.71
-79.36
-34.49%
BMRN
BioMarin Pharmaceutical
72.03
-13.97
-16.24%
NBIX
Neurocrine
110.87
-27.74
-20.01%
REGN
Regeneron
744.83
-218.37
-22.67%
VRTX
Vertex Pharmaceuticals
500.01
85.54
20.64%
Alkermes Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: 10.26% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong financial performance in 2024 with record revenues, significant progress in pipeline development, and strategic debt management. However, challenges such as anticipated reductions in manufacturing and royalty revenues and the need for continued growth in mature product lines present headwinds. The company's strategic focus on profitability and pipeline advancement, particularly with ALKS 2680, positions it well for future growth.Highlights
Record-Breaking Revenue Achievement
Alkermes achieved over $1.5 billion in revenue for 2024, driven by a proprietary product portfolio with an 18% year-over-year growth, and over $1 billion in net sales from proprietary products.
Strong EBITDA Performance
The company exceeded their EBITDA goal with more than $450 million from continuing operations and projects over $200 million in EBITDA for 2025.
Debt-Free Status and Cash Reserves
Alkermes retired all of its debt, ending 2024 with $825 million in cash. They also repurchased approximately 8 million shares, strengthening the balance sheet.
VIVITROL and LYBALVI Growth
VIVITROL sales increased by 14% year-over-year and LYBALVI by 46%. LYBALVI's growth is attributed to a 39% increase in TRx growth, with plans to expand market access in 2025.
Pipeline Progress with ALKS 2680
Significant progress in neuroscience development pipeline with two well-powered Phase 2 studies for ALKS 2680 in narcolepsy, positioning for potential transformation in 2025.
Lowlights
Inventory and Gross-to-Net Dynamics
An extra ordering cycle and gross-to-net favorability drove a one-time revenue tailwind of approximately $35 million in Q4.
Decrease in Manufacturing and Royalty Revenues
A projected decrease of approximately $215 million in manufacturing and royalty revenues for 2025 due to the expiration of INVEGA SUSTENNA U.S. royalty.
Flat to Modest Growth for Mature Products
Anticipated flat to modest growth for mature products VIVITROL and ARISTADA in 2025, reflecting market dynamics.
Company Guidance
During the Alkermes Fourth Quarter 2024 Financial Results Conference Call, the company provided guidance for 2025, highlighting key financial expectations and strategic focuses. In 2024, Alkermes achieved over $1.5 billion in revenue, driven by its proprietary commercial portfolio, resulting in more than $450 million in EBITDA. For 2025, the company anticipates generating over $200 million in EBITDA while advancing its orexin program. The guidance outlines total revenues for 2025 to be between $1.34 billion and $1.43 billion, with net sales from proprietary products expected to range from $1.09 billion to $1.15 billion. They forecast EBITDA between $215 million and $245 million and adjusted EBITDA from $310 million to $340 million. The focus for 2025 includes continued growth for key products like LYBALVI, with anticipated 25% demand growth, and advancing its pipeline, particularly the ALKS 2680 Phase 2 studies in narcolepsy.Alkermes Corporate Events
Product-Related AnnouncementsBusiness Operations and Strategy
Alkermes Advances Orexin Program with ALKS 2680 Candidate
Positive
Jan 13, 2025
Alkermes announced significant advancements in its orexin agonist program, particularly with its ALKS 2680 candidate, expected to provide pivotal data in 2025. The company, boasting a strong financial position with over $1 billion in expected product sales, sees substantial opportunities for value creation as it leads in innovative treatments for hypersomnolence disorders, potentially reshaping the market with its upcoming studies and regulatory strategies.
Private Placements and FinancingBusiness Operations and Strategy
Alkermes Prepares for New Flexibility Post Credit Termination
Neutral
Dec 19, 2024
Alkermes, Inc. has fully prepaid and terminated its Amended and Restated Credit Agreement with Morgan Stanley and other lenders, avoiding any early termination penalties aside from customary breakage costs. This move effectively releases all liens on collateral associated with the credit agreement, potentially impacting the company’s financial flexibility and operational strategies.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.