Ireland-based biopharmaceutical company Alkermes PLC recently announced its 2015 earnings and gave guidance for 2016. While Alkermes' 2015 operating performance was in line with our expectations, the company's announced 2016 projections for its selling, general, and administrative (SG&A) and research and development (R&D) costs were considerably higher than our previous base-case assumptions and also meaningfully higher than the costs reported in 2015. We have revised our base-case scenario and now expect costs to remain elevated over a longer term resulting in negative EBITDA and cash flows in 2016-2017 and improving into positive territory in 2018. Our base case also projects weaker leverage measures when the company achieves profitability. Leverage will improve to the mid-4.0x area in 2018, in contrast to
