With good news on Lybalvi, Alkermes sees 10% share price increase

As stripped down and divested Alkermes enters 2024 as a “pure-play neuroscience company”—as described by CEO Richard Pops on a conference call on Thursday—much will depend on the success of new schizophrenia and bipolar disorder drug Lybalvi.

With the company revealing fourth-quarter sales of $56.2 million for Lybalvi, the olanzapine and samidorphan treatment is continuing its upward trajectory.

Sales are up 61% year over year for the drug which was approved in 2021. More tellingly, the sequential sales of Lybalvi are showing positive progress. After a slowdown in the third quarter to $50.7 million, which didn’t measure up to the growth demonstrated in previous periods (from $38 million in the first quarter to $47 million in the second), the sales are once again on an upward trajectory.

“In Q3 we saw a little bit of softness overall due to some inventory drawdown and also some seasonality with patient visits,” Todd Nichols, Alkermes’ chief commercial officer, said during the conference call. “We did see a nice recovery of that into Q4, which led to 11% growth (in prescriptions). Overall, the full year of 2023 was really a demand-related story. Demand grew over 100% year over year, which we’re really encouraged with.”

Alkermes is projecting 2024 sales of Lybalvi to reach between $275 million to $295 million, after hitting $192 million last year.

Investors liked what they heard about Lybalvi and the company in general as its stock price zoomed upward by 10% by late morning on Thursday.  

The combo treatment was designed to help patients avoid the weight gain that accompanies Eli Lilly’s former blockbuster Zyprexa (olanzapine), paired with samidorphan, an opioid antagonist designed to counter the metabolic side effects of olanzapine.

“It’s yet to be determined with some of the weight loss products coming onto the market but our expectation is that we will continue to see strong demand for Lybalvi,” Blair Jackson, Alkermes' chief operating officer, said.

One threat to Lybalvi is the highly anticipated approval this year of Karuna Therapeutics’ drug KarXT. The blockbuster potential of the treatment compelled Bristol Myers Squibb to buy out Karuna in December for $14 billion.

“That’s a product that would be approved in one of our indications, that’s schizophrenia,” Nichols said. “It’s important to remember that Lybalvi basically has equal contribution from prescriptions from both bipolar disorder and schizophrenia, so there’s broad utility overall within the product.”

Nichols added that discussions with physicians indicate that another product entering the market with demonstrated efficacy would be a “good thing” for Lybalvi.

Alkermes reported $113 million in net income for the fourth quarter after reporting a loss in the fourth quarter of 2022.

Thanks almost entirely to the sales bump from Lybalvi, the company's revenue reached $377 million in the fourth quarter, up from $305 million in the same period of 2022, and topping analyst expectations of $361 million. For the year, the company’s revenue came in at $1.7 billion, which was up from $1.1 billion in 2022. Alkermes projects revenue to come in at between $1.5 billion and $1.6 billion in 2024.

A major factor in the revenue increase in 2023 and projected decline this year was a favorable ruling in a patent case against Johnson & Johnson, which included back royalty payments of $195 million from 2022. The royalty payments from J&J will end in August of this year, the company said.  

Alkermes' alcohol-dependence drug Vivitrol achieved sales of $102.4 million in the fourth quarter and $400 million for the year, up from $379 million in 2022. The company anticipates sales for Vivitrol to range between $410 million and $430 million this year.

Antipsychotic therapy Aristada hauled in $83.4 million in the fourth quarter and $328 million for the year, up from $302 million in 2022. The company expects Aristada’s sales to increase to between $340 million and $360 million in 2024.