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Why Is Alkermes (ALKS) Down 21% Since Last Earnings Report?

Zacks Equity Research
Adobe Systems (ADBE) closed at $306.87 in the latest trading session, marking a -1.04% move from the prior day.

It has been about a month since the last earnings report for Alkermes (ALKS). Shares have lost about 21% 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 its most recent earnings report in order to get a better handle on the important catalysts.

Alkermes Reports Narrower-Than-Expected Loss in Q1

Alkermes reported a loss of 17 cents per share in the first quarter of 2019, narrower than the Zacks Consensus Estimate of a loss of 19 cents. The loss was, however, wider than the year-ago quarter’s loss of 9 cents.

The company’s revenues of $223.1 million in the quarter declined 0.9% from the year-ago quarter. The top line, however, beat the Zacks Consensus Estimate of $221.2 million. The company’s proprietary products — Vivitrol and Aristada — drove revenues. However, this was offset by declining royalties on Acorda’s Ampyra,  ALkeremes receives royalties on Ampyra.

Quarters in Detail

Vivitrol sales improved about 10% year over year to $69.2 million.

Aristada sales came in at $30.3 million, up 4% year over year.

Manufacturing and royalty revenues from Risperdal Consta, InvegaSustenna/Xeplion and InvegaTrinza/Trevicta were $75.6 million, up 9.9% year over year. The same from Ampyra/Fampyra were down 56.9% year over year to $12.2 million as the drug faces generic competition. Research and development revenues from the collaboration with Biogen for diroximel fumarate (BIIB098) were $13.9 million, down 20.6% year over year.

Research and development (R&D) expenses were $102.5 million, down 5.3% year over year.

Selling, general and administrative (SG&A) expenses were $141.2 million, up 19.3% year over year.

2019 Outlook

Alkermes reiterated its guidance for 2019. The company expects total revenues of $1.14-$1.19 billion, driven by anticipated growth of its proprietary products and an expected $150-million milestone payment from Biogen in the fourth quarter of 2019 related to the potential FDA approval of diroximel fumarate (BIIB098).

Alkermes expects Vivitrol sales to be $330-$350 million, while Aristada sales are anticipated to be $210-$230 million. The company expects R&D expenses to be $450-$480 million. Alkermes’ guidance for SG&A expenses is $590-$620 million.

The company expects earnings per share to be 25-43 cents.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a flat path over the past two months. The consensus estimate has shifted 7.56% due to these changes.

VGM Scores

Currently, 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.


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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