Alkermes’ Solid Financial Performance Driven by Proprietary Products

Alkermes plc, a global biopharmaceutical company, has reported strong financial results for the first nine months of 2025. The company’s success is largely driven by the performance of its proprietary products, which continue to see growing demand and market share.

Proprietary Product Sales Shine

Alkermes’ product sales, net, which consist of sales of its proprietary drugs VIVITROL, ARISTADA/ARISTADA INITIO, and LYBALVI, increased by 12% to $869.2 million in the first nine months of 2025, compared to $775.8 million in the same period of 2024.

The increase was primarily due to a 19% rise in LYBALVI unit sales and a 3% price increase across all three proprietary products that went into effect on January 1, 2025. This offset slight declines in unit sales for VIVITROL and ARISTADA/ARISTADA INITIO.

The company was also able to achieve more favorable gross-to-net adjustments, such as Medicaid rebates, during the period. Actual rebates were lower than original estimates, leading to an improvement in the percentage of gross sales retained as net sales.

Table 1: Product Sales, Net

Product	3 Months Ended Sep 30		9 Months Ended Sep 30
	2025	2024	2025	2024
VIVITROL	$121.1M	$113.7M	$343.8M	$323.2M
ARISTADA/INITIO	$98.1M	$84.7M	$272.8M	$249.6M
LYBALVI	$98.2M	$74.7M	$252.6M	$203.1M
Total	$317.4M	$273.0M	$869.2M	$775.8M

Royalty and Manufacturing Revenues Decline

While product sales grew, Alkermes’ manufacturing and royalty revenues declined by 37% to $222.2 million in the first nine months of 2025, compared to $351.8 million in the same period of 2024.

This was primarily due to a $121.6 million decrease in royalties from the long-acting INVEGA products, as Alkermes’ royalty on U.S. sales of INVEGA SUSTENNA expired in August 2024. Royalties from this product line have been and are expected to continue being lower in 2025.

Revenues from VUMERITY, licensed to Biogen, increased by $3.7 million, offsetting some of the decline. However, VUMERITY manufacturing revenue decreased by $14.0 million due to fewer batches produced for Biogen.

Table 2: Manufacturing and Royalty Revenues

Product	3 Months Ended Sep 30		9 Months Ended Sep 30
	2025	2024	2025	2024
INVEGA Products	$30.2M	$58.5M	$78.3M	$199.9M
VUMERITY	$35.6M	$32.6M	$102.8M	$99.1M
RISPERDAL CONSTA	$3.8M	$2.4M	$16.7M	$8.7M
Other	$7.2M	$11.6M	$24.4M	$44.1M
Total	$76.8M	$105.1M	$222.2M	$351.8M

Costs and Expenses Managed Effectively

Alkermes has maintained tight control over its costs and expenses. Cost of goods manufactured and sold decreased by 18% to $150.2 million in the first nine months of 2025, compared to $183.2 million in the same period of 2024. This was primarily due to lower costs for certain legacy products following the sale of the Athlone facility in May 2024, as well as decreases in costs related to out-of-specification batches and investigation costs for the company’s proprietary products.

Research and development (R&D) expenses increased by 23% to $230.9 million in the first nine months of 2025, compared to $187.1 million in the same period of 2024. This was mainly driven by a $32.6 million increase in spending on the development of Alkermes’ investigational drug alixorexton, as the company advanced the program into phase 2 studies. Internal R&D expenses also rose by $5.0 million due to a 9% increase in R&D headcount.

Selling, general, and administrative (SG&A) expenses increased by 3% to $514.3 million in the first nine months of 2025, compared to $498.2 million in the same period of 2024. This was primarily due to a $23.5 million increase in sales and marketing employee-related expenses, partially offset by an $11.1 million decrease in marketing spend.

Strong Balance Sheet and Cash Flows

Alkermes maintains a robust financial position, with $1.14 billion in cash, cash equivalents, and investments as of September 30, 2025. The company generated $350.6 million in cash from operating activities in the first nine months of 2025, up from $248.7 million in the same period of 2024.

In connection with the proposed acquisition of Avadel Pharmaceuticals, Alkermes has secured a $1.2 billion bridge credit facility and has placed $700 million of its own cash into an escrow account to finance the transaction.

Outlook and Risks

Alkermes’ financial performance has been driven by the continued success of its proprietary products, particularly LYBALVI, which has seen strong volume growth. The company has also effectively managed its costs and expenses, leading to healthy profitability and cash flow generation.

However, the company faces some risks and challenges going forward. The expiration of its royalty on U.S. sales of INVEGA SUSTENNA has resulted in a significant decline in royalty revenues, which may continue to pressure the company’s top line. Additionally, Alkermes and its licensees are involved in various legal proceedings related to patents covering certain products, which could impact future sales and profitability.

The proposed acquisition of Avadel Pharmaceuticals also presents both opportunities and risks for Alkermes. While the transaction could expand the company’s product portfolio and pipeline, there are no guarantees that the acquisition will be completed as planned or that the anticipated benefits and synergies will be fully realized.

Overall, Alkermes has demonstrated strong financial execution, with its proprietary products driving growth and profitability. However, the company will need to navigate the expiration of key royalties, legal challenges, and the integration of any potential acquisitions to maintain its positive momentum and deliver value to shareholders.