What Alkermes (ALKS) Said on Its Q3 Earnings Call

Key Points

• Commercial performance remained strong: Third-quarter revenue was $480.1 million, including $417.3 million from proprietary products, which grew 31% year over year. Alkermes maintained full-year sales guidance for VIVITROL, ARISTADA, LYBALVI and LUMRYZ, with proprietary product sales expected to approach $1.6 billion in 2026.
• Profitability reflected higher investment and transaction costs: Adjusted EBITDA was $120.1 million, while research and development expense rose to $121.1 million as Alkermes expanded its orexin programs. Management expects cost of goods sold to decline in 2027 as most LUMRYZ inventory-related accounting charges are recognized in 2026.
• The orexin pipeline is the company’s primary growth opportunity: Alixorexton Phase III trials in narcolepsy are underway, with results expected from mid-2027, while Phase II data in idiopathic hypersomnia are anticipated around year-end 2026 or early 2027. Alkermes is also advancing orexin candidates in ADHD, depression and fatigue associated with multiple sclerosis or Parkinson’s disease.

Alkermes NASDAQ: ALKS reported third-quarter 2026 results marked by 31% year-over-year growth in proprietary product sales, while management highlighted continued investment in its orexin development portfolio across sleep, neuropsychiatric and neurological disorders.

Total revenue for the quarter ended Sept. 30 was $480.1 million, including $417.3 million in net sales from the company’s proprietary products. Manufacturing and royalty revenue totaled $62.9 million, including $29.5 million from VUMERITY and $26.4 million from long-acting INVEGA products.

“Our focus now is on execution,” Chief Executive Officer Blair Jackson said on his first quarterly call as CEO. Jackson said the company aims to advance its pipeline with rigor and urgency while maintaining commercial performance and allocating capital toward its highest-value opportunities.

Commercial portfolio posts broad growth

Chief Commercial Officer Todd Nichols said performance reflected contributions from the company’s addiction, psychiatry and sleep-medicine products. Alkermes maintained its full-year revenue guidance for each of its four proprietary brands.

• VIVITROL: Third-quarter net sales were $127.6 million. Sales included about $8 million of favorable gross-to-net adjustments, primarily related to patient mix. Alkermes reiterated expected full-year sales of $460 million to $480 million.
• ARISTADA: Net sales for the ARISTADA product family totaled $103.9 million, aided by demand growth and approximately $7 million in gross-to-net and inventory favorability. Full-year guidance remained $365 million to $385 million.
• LYBALVI: Net sales reached $95.9 million, while underlying prescriptions increased 18% from a year earlier. The company said expanded payer access now covers about 80% of lives. Full-year sales guidance remained $380 million to $400 million.
• LUMRYZ: Net sales totaled $89.9 million, with approximately 4,100 patients on therapy at quarter-end. Results included the drawdown of about $7 million in inventory built during the second quarter. Alkermes expects total 2026 LUMRYZ sales of $350 million to $370 million, of which it expects to record $315 million to $335 million following the mid-February close of the Avadel transaction.

For the fourth quarter, Alkermes expects proprietary product net sales of $400 million to $420 million. Management said the proprietary portfolio is expected to generate nearly $1.6 billion in net sales for full-year 2026.

On LUMRYZ, Nichols said the company believes oxybate therapies and emerging orexin therapies could be complementary. He said management expects an initial impact from Takeda’s anticipated orexin product launch to be “somewhat marginal” for oxybates, though the company will monitor market dynamics.

Alkermes has presented positive Phase III data for LUMRYZ in idiopathic hypersomnia, or IH, and plans to submit a supplemental new drug application. If approved, management said a potential IH launch could occur in March 2028.

Profitability and 2027 outlook

Alkermes reported GAAP net income of $16.3 million and EBITDA of $63 million for the third quarter. Adjusted EBITDA was $120.1 million. The company ended the quarter with approximately $787.6 million in cash and total investments.

Cost of goods sold rose to $94.2 million from $51.6 million a year earlier, including purchase-price fair-value accounting associated with LUMRYZ inventory. Research and development expense increased to $121.1 million from $81.7 million, reflecting investment in orexin programs. Selling, general and administrative expense rose to $208.5 million from $171.8 million, primarily due to the addition of Avadel’s commercial infrastructure.

Chief Financial Officer Joshua Reed said Alkermes reiterated its full-year 2026 financial expectations across all line items. Looking toward 2027, Reed said cost of goods sold should decline as the majority of the non-cash LUMRYZ inventory fair-value step-up is recognized in 2026. He said SG&A, excluding early-2026 transaction costs, should be broadly similar next year, while R&D spending will reflect a growing number of clinical programs.

Orexin pipeline advances across multiple indications

Jackson said Alkermes’ primary growth opportunity lies in its orexin 2 receptor agonist portfolio. The company’s most advanced candidate, alixorexton, is being studied in narcolepsy and IH.

Phase III Brilliance trials in narcolepsy type 1 and type 2 are underway, with top-line results expected beginning in mid-2027. Alkermes also completed enrollment in the approximately 130-patient Phase II Vibrance-3 study of alixorexton in IH. The trial includes once-daily and split-dose approaches and evaluates wakefulness and IH symptom severity. Top-line data are expected around year-end or in early 2027.

Management said it plans to move quickly toward a potential Phase III IH program after reviewing Vibrance-3 data and meeting with regulators. Jackson said the company expects a potential Phase III program to be similar in scale to its narcolepsy type 2 study, though final design will depend on Phase II findings.

Alkermes also highlighted initial clinical findings for ALKS 7290 in adults with attention-deficit/hyperactivity disorder. In a 50-subject Phase Ib proof-of-concept study, the company said the candidate was generally well tolerated, with no serious treatment-emergent adverse events and no discontinuations among treated participants. Management reported dose-dependent improvements from baseline on exploratory measures of ADHD symptoms, disease severity and cognitive performance.

A Phase II ADHD study is enrolling adults and is evaluating once-daily and split-dose regimens, with results expected in the second half of 2027. The company has also initiated a 150-patient Phase II study of ALKS 7290 as an adjunctive treatment for adults with major depressive disorder who have had a partial response to standard antidepressants.

In addition, Alkermes plans to initiate a Phase II study of ALKS 4510 for fatigue associated with multiple sclerosis or Parkinson’s disease. Jackson said the company expects six orexin-related studies to read out over the next year, including alixorexton studies in IH and narcolepsy, the ADHD trial and the fatigue proof-of-concept study.

About Alkermes (NASDAQ:ALKS)

Alkermes plc NASDAQ: ALKS is a biopharmaceutical company focused on developing and commercializing medicines for central nervous system diseases. Its research and development activities address conditions including schizophrenia, bipolar disorder, addiction, depression and other neuropsychiatric disorders.

The company's marketed products include Vivitrol, an extended-release injectable form of naltrexone used to treat alcohol dependence and prevent relapse to opioid dependence; Aristada and Aristada Initio, long-acting injectable formulations of aripiprazole lauroxil for the treatment of schizophrenia; and Lybalvi, a combination of olanzapine and samidorphan approved for schizophrenia and bipolar I disorder in adults.

Founded in 1987, Alkermes is incorporated in Ireland and maintains its corporate headquarters in Waltham, Massachusetts.

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