Alkermes has bumped up its revenue forecast for 2023 by $425 million after winning a final award in its arbitration battle with Johnson & Johnson over the licensing of its NanoCrystal technology.
The Dublin-based company said the final award came last week from the arbitral tribunal. It includes $194 million in back royalties from 2022 through March 15 of this year, which have already been received from J&J. Added to that are anticipated royalties from 2023 sales of J&J products that were developed using NanoCrystal.
The J&J products in question are schizophrenia drugs Invega and Sustenna, plus the HIV treatment Cabenuva, which was developed in partnership with GSK’s ViiV unit. The key to the success of these therapies is their long-acting ability, which is facilitated by Alkermes’ technology platform that stabilizes drugs into nanometer-sized particles, enabling oral, inhaled and injectable formulations.
In November of last year, J&J filed to partially terminate its licensing agreement with Alkermes, saying that the products no longer use the technology.
“We were utterly convinced of the correctness of our position,” Alkermes CEO Richard Pops said during a conference call Tuesday. “This is an arbitration that never should have happened.”
The implications are massive for Alkermes, which previously estimated 2023 revenue to fall in a range of $1.13 billion to $1.25 billion. The new projection is for revenues to land between $1.55 billion and $1.68 billion.
Even with the added funding, Pops said that the company will not alter its plan for investment in bipolar drug Lybalvi and other neuroscience drugs in development.
Additionally, the 35-year-old company is spinning off its oncology sector into a new business. That plan, announced in November of last year, remains unchanged. Alkermes will become more commercially focused and have more flexibility with the added funding, Pops said on Tuesday.
“Obviously with a stronger balance sheet as we move into this spin-neuroscience company, we have more firepower to continue to build out the pipeline,” Pops said. “Let’s just understand, we’re being quite judicious about escalating the R&D spend in proportion with the profitability as we grow."
Under the arbitration ruling, Alkermes will receive royalties for Invega Sustenna until August of 2024. Royalties for Invega Trinza and Invega Hafyera will continue to be paid by J&J into May of 2030.
J&J’s Invega franchise accounted for $4.1 billion in sales in 2022, including $2.7 billion in the U.S.
Alkermes will receive royalties for Cabenuva through the end of 2036. The long-acting injectable, which was approved in 2021, achieved sales of 340 million pounds sterling ($419 million) last year. Revenues for the product are expected to grow rapidly in the coming years.