Alkermes Q4 Earnings Call Highlights

Key Points

• Alkermes reported nearly $1.5 billion in 2025 revenue (proprietary sales ≈ $1.2B) and GAAP net income of $241.7M, but after closing the Avadel deal it guides 2026 to total revenue of $1.73–1.84B with a 2026 GAAP net loss of $115–135M while projecting adjusted EBITDA of $370–410M.
• The Feb 2026 Avadel acquisition adds LUMRYZ revenue (guidance $350–370M for 2026) and accelerated entry into sleep medicine, financed with about $775M cash plus $1.525B of term loans due 2031, and includes a ~$150M non‑cash inventory step‑up that will affect 2026 cost of goods sold.
• Pipeline momentum: lead orexin candidate alixorexton has Breakthrough Therapy status and is advancing into a global Phase III "BRILLIANCE" program, while two additional OX2R agonists and potential REVITALYZ idiopathic hypersomnia data (Q2) position the company for late‑stage development; leadership shifts as COO Blair Jackson becomes CEO this summer.

Alkermes NASDAQ: ALKS executives highlighted a “strong and eventful” 2025 and outlined a 2026 plan focused on expanding the company’s commercial platform following its Avadel acquisition while advancing its orexin pipeline, led by alixorexton, into late-stage development. Management also announced a CEO transition, with longtime chief executive Richard Pops set to step down this summer and current Chief Operating Officer Blair Jackson slated to take over; Pops will remain chairman.

2025 results: revenue growth and profitability

For full-year 2025, Alkermes reported total revenues of nearly $1.5 billion, driven primarily by proprietary product net sales of approximately $1.2 billion, which grew 9% year over year. By brand, the company reported 2025 net sales of $467.9 million for VIVITROL, $370.0 million for ARISTADA, and $346.7 million for LYBALVI.

Manufacturing and royalty revenues totaled $291.3 million, including $130.5 million from VUMERITY and $109.6 million from long-acting Invega products, according to the company.

On expenses, the company said cost of goods sold declined to $196.5 million from $245.3 million in the prior year, primarily reflecting efficiencies following the sale of its Athlone-based manufacturing business. R&D rose to $324.0 million from $245.3 million, reflecting investments in the VIBRANCE phase II studies for alixorexton in narcolepsy and idiopathic hypersomnia, as well as early work on orexin 2 receptor agonist candidates ALKS 4510 and ALKS 7290. SG&A increased to $701.5 million from $645.2 million, reflecting an expanded psychiatry field organization, LYBALVI promotional activity, and certain legal and transaction-related costs.

Alkermes reported GAAP net income of $241.7 million for 2025, EBITDA of $285.6 million, and adjusted EBITDA of $394.0 million. The company ended 2025 with $1.3 billion in cash and total investments.

Avadel acquisition and 2026 financial outlook

Management emphasized that the Avadel acquisition, which closed in February 2026, adds a new revenue stream and accelerates Alkermes’ entry into the commercial sleep medicine market. To fund the transaction, the company said it used approximately $775 million of cash and entered into term loans totaling $1.525 billion due in 2031, with an expectation to pay down the debt quickly using cash flows.

For 2026, Alkermes guided total revenues of $1.73 billion to $1.84 billion, including proprietary product net sales of $1.52 billion to $1.60 billion. It expects manufacturing and royalty revenues of $210 million to $240 million, reflecting scheduled expiration of certain XEPLION royalties that phase out on a country-by-country basis in the second half of 2026. The company also noted that its VUMERITY manufacturing obligations were completed in 2025, with future VUMERITY revenue expected to be solely royalty-based “without any associated costs.”

Cost of goods sold is expected to be $365 million to $385 million, driven largely by purchase price accounting for LUMRYZ inventory. Alkermes said LUMRYZ inventory was marked to fair market value at closing, increasing value by about $180 million above cost, with approximately $150 million expected to be expensed as inventory is sold in 2026.

For 2026, the company expects:

• R&D: $445 million to $485 million, reflecting a combined organization and expanded orexin development activity
• SG&A: $890 million to $930 million, including about $50 million of one-time transaction costs related to the Avadel deal and the incorporation of LUMRYZ commercial infrastructure
• Amortization of intangibles: $95 million to $105 million
• Net interest expense: $75 million to $85 million
• Net tax benefit: approximately $20 million

While GAAP results will be affected by acquisition accounting, Alkermes guided to a 2026 GAAP net loss of $115 million to $135 million, EBITDA of $60 million to $90 million, and adjusted EBITDA of $370 million to $410 million. Adjusted EBITDA excludes share-based compensation, $50 million of transaction-related expenses, and the non-cash $150 million inventory step-up charge.

For the first quarter of 2026, Alkermes expects proprietary product net sales of $310 million to $330 million, manufacturing and royalty revenues of $40 million to $45 million, and adjusted EBITDA of $30 million to $50 million.

Commercial performance: VIVITROL, ARISTADA, LYBALVI, and LUMRYZ

Chief Commercial Officer Todd Nichols said 2025 proprietary product sales totaled $1.18 billion and landed “at the high end” of Alkermes’ increased guidance ranges from October, driven by performance across all three core brands.

For VIVITROL, Alkermes reported 2025 net sales of $467.9 million, representing 2% growth year over year. Nichols attributed performance to growth in alcohol dependence and the company’s ability to capitalize on localized dynamics in certain states and payer systems. Management noted that 2025 results included about $27 million of gross-to-net favorability that is not expected to recur. For 2026, Alkermes guided VIVITROL net sales of $460 million to $480 million.

ARISTADA net sales were $370.0 million in 2025, up 7% year over year, with management citing expanding prescriber breadth, persistency, and strong new-to-brand prescriptions. Alkermes said ARISTADA also benefited from about $14 million of gross-to-net favorability in 2025 that is not expected to recur in 2026. The company guided ARISTADA net sales of $365 million to $385 million for 2026.

LYBALVI net sales increased 24% year over year to $346.7 million in 2025, and Nichols said underlying total prescriptions (TRx) grew 24% as well, supported by momentum in new patient starts and expanded prescriber breadth. Gross-to-net adjustments were about 29% in 2025. For 2026, Alkermes guided LYBALVI net sales of $380 million to $400 million, and said it expects gross-to-net to widen into the mid-30% range starting in Q1 as it expands payer access to support broader adoption.

The Avadel acquisition brings LUMRYZ, a once-at-bedtime sodium oxybate for narcolepsy. Nichols said LUMRYZ generated approximately $279 million in net sales in 2025 and had about 3,500 patients on therapy at year-end, a roughly 40% increase from Q4 2024. Alkermes guided 2026 LUMRYZ total revenue of $350 million to $370 million. The company said the first six weeks of 2026 generated about $33 million in LUMRYZ revenue and expects an additional $315 million to $335 million in LUMRYZ net sales for the remainder of 2026.

In Q&A, Nichols said Alkermes does not currently see significant overlap between its psychiatry sales force and sleep medicine sales force, but expects synergies to emerge over time as it prepares for a potential alixorexton launch. He added that LUMRYZ payer access remains strong, with more than 90% of commercial patients having access, and said the company had not seen material changes early in 2026 despite broader market discussions about multi-source generics affecting other oxybate products.

Pipeline focus: alixorexton moves to phase III; broader orexin portfolio advances

Management said alixorexton, its lead orexin candidate, is expected to enter phase III in narcolepsy during the current quarter following an end-of-phase II FDA meeting held “last week” and the drug’s recent FDA Breakthrough Therapy designation. Pops described the FDA interaction as “detailed and constructive” and said it confirmed key design elements for the pivotal program.

The planned global “BRILLIANCE” phase III program will include three 12-week randomized, placebo-controlled studies: two in narcolepsy type 1 (NT1) and one in narcolepsy type 2 (NT2). In NT1, each study is planned to enroll about 150 patients across three arms, with change in mean sleep latency on the Maintenance of Wakefulness Test (MWT) as the primary endpoint and weekly cataplexy rates and the Epworth Sleepiness Scale (ESS) as key secondary endpoints. The NT2 study is planned as a four-arm trial enrolling about 180 patients, with MWT as the primary endpoint and ESS as a key secondary endpoint.

Pops also discussed dosing strategy, emphasizing a once-daily dose as an “anchor” and adding split-dosing regimens intended to extend wakefulness later into the evening. In response to analyst questions, he said split dosing is designed to “maximize the later durations while minimizing side effects” and later confirmed that split doses will be included in the registrational program.

Beyond alixorexton, management outlined plans to advance two additional orexin 2 receptor agonists now in phase I healthy volunteer studies. The company plans to move ALKS 7290 into ADHD patients, including a multi-dose phase Ib translational study with data expected in the second half of 2026 and a phase II start anticipated in the second half. For ALKS 4510, Alkermes plans to initiate a multi-dose phase IIa study evaluating fatigue associated with multiple sclerosis and Parkinson’s disease.

In addition, Pops said Alkermes expects data in the second quarter from the phase III REVITALYZ study of LUMRYZ in idiopathic hypersomnia (IH), describing it as a 14-week randomized withdrawal trial enrolling about 150 patients. If positive, management said it expects the data could support an sNDA submission and a potential launch in early 2028, if approved.

Blair Jackson also addressed Valiloxybate, a sodium-free, once-nightly oxybate candidate acquired with Avadel that is in the early clinic. Jackson said Alkermes intends to move the program forward “as quickly as possible,” but that it is too early to determine whether it could ultimately be a replacement for LUMRYZ or an additional portfolio product.

Leadership transition and outlook

In closing remarks, Pops said he will pass the CEO role to Jackson this summer while continuing as chairman. He said the timing reflects the company’s current position following a multi-year transformation and the addition of a late-stage “potential blockbuster” development program. Management reiterated that 2026 is positioned as a year of execution across commercial integration and late-stage clinical development.

About Alkermes NASDAQ: ALKS

Alkermes plc is a biopharmaceutical company focused on developing innovative medicines to address unmet needs in the central nervous system (CNS). The company applies its proprietary drug delivery technologies and therapeutic expertise to advance treatments for addiction, schizophrenia, bipolar I disorder and depression. Alkermes' portfolio includes both commercial products and a pipeline of investigational therapies designed to improve patient outcomes and support long-term disease management.

Alkermes' commercial franchise features several approved products.

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