Alkermes PLC

Overview Key strengths Key risks Relatively long-dated product portfolio, with no near-term patent expirations. Small, concentrated portfolio, with profitability dependent on a small handful of key products. The successful recent launch of Lybalvi eliminates some near-term execution risks. Largely concentrated in one therapeutic area (central nervous system) that is relatively competitive. Significant cash balances. Alkermes launched Lybalvi, an atypical antipsychotic for the treatment of schizophrenia, in October 2021. While uptake has been strong, and we estimate peak sales of around $700 million, Alkermes is investing heavily in this launch and faces near-term revenue pressure from Johnson&Johnson (J&J) subsidiary Janssen Pharmaceuticals? decision to partially terminate its U.S. licensing agreement for Invega. Consequently, we forecast about $95 million in 2022

...2022 will be a transition year for Alkermes, as revenues from the recently launched Lybalvi will not yet offset declines from the Invega franchise. Alkermes launched Lybalvi, an atypical antipsychotic for the treatment of schizophrenia, in October 2021. While uptake has been strong, and we estimate peak sales of around $700 million, Alkermes is investing heavily in this launch and faces near-term revenue pressure from Johnson & Johnson (J&J) subsidiary Janssen Pharmaceuticals' decision to partially terminate its U.S. licensing agreement for Invega. Consequently, we forecast about $95 million in 2022 Invega royalties, a decline of over $200 million from 2021. As a result, we expect 2022 leverage will materially exceed 5x. However, we expect metrics to return to long-term levels comfortably below 5x in 2023, given strong projected growth from Lybalvi and mid to high single-digit growth from other key...

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