Alkermes (NASDAQ: ALKS) shares jumped almost 15% on February 16, after the company delivered impressive fourth-quarter results topping both earnings and revenue estimates. Furthermore, the company provided strong FY2022 guidance and provided bullish long-term profitability targets.
Alkermes is a global biopharmaceutical company that develops innovative medicines in the fields of neuroscience and oncology.
Q4 Beat
Markedly, adjusted earnings of $0.23 per share more than doubled year-over-year and significantly beat analysts’ expectations of $0.11 per share. The company reported earnings of $0.10 per share for the prior-year period.
Further, revenues jumped 15.9% year-over-year to $324.5 million and exceeded consensus estimates of $308.88 million.
The increase in revenues reflected robust Product sales growth of 20% to $178.9 million, and a 9.6% growth in Manufacturing and Royalty revenues to $143.37 million.
FY2022 Outlook & Long-Term Profitability Targets
Based on robust Q4 results and expected improvement in COVID-19 pandemic-related disruptions, management issued the financial guidance for FY2022.
The company forecasts FY22 adjusted loss in the range of ($0.18) per share to $0 per share. Revenues are forecast to be in the range of $1 billion and $1.09 billion.
Furthermore, the company updated long-term profitability targets to reflect a focus on proprietary products, and the removal of all royalty revenues related to sales of the long-acting INVEGA products in the U.S. after January 2022, and outside the U.S. after May 2022.
In FY 2024, adjusted net income is projected to be in the range of 15% to 20% of the company’s total revenues. For FY25 and FY26, adjusted net income is likely to equal 25% and 30% respectively of the company’s total revenues.
CEO Comments
Looking ahead, Alkermes CEO Richard Pops, commented, “In 2022, we are focused on execution as we advance the commercial launch of LYBALVI, enroll our nemvaleukin clinical studies, demonstrate disciplined allocation of capital and manage the business to drive long-term profitability and value creation for our shareholders.”
Wall Street’s Take
Following upbeat Q4 results, Mizuho Securities analyst Vamil Divan increased the price target on Alkermes to $35 (30.65% upside potential) and reiterated a Buy rating.
The rest of the Wall Street community is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 3 Buys and 3 Holds. The average Alkermes stock forecast of $29.33 implies 16.99% upside potential to current levels.
Investors Weigh In
TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Alkermes, with 19.2% of investors increasing their exposure to ALKS stock over the past 30 days.
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