Alkermes plc Completes Sale of Athlone, Ireland Facility to Novo Nordisk

Rhea-AI Summary

Alkermes plc has completed the sale of its development and manufacturing facility in Athlone, Ireland to Novo Nordisk for approximately $91 million. The sale is part of Alkermes' program to drive operational efficiency and align its infrastructure with business needs. The transaction includes a subcontracting agreement with Novo Nordisk until the end of 2025, expected to be cost-neutral to Alkermes. Post-subcontracting, the sale is anticipated to provide significant operating cost benefits and enhance profitability. Alkermes will retain royalty revenues from products manufactured at the facility while continuing to produce its commercial products in Ohio.

Positive

• The sale of the Athlone facility to Novo Nordisk for $91 million provides a significant cash infusion for Alkermes.

• The subcontracting agreement with Novo Nordisk until 2025 is expected to be cost-neutral for Alkermes, contributing to enhanced profitability post-subcontracting.

• The sale aligns with Alkermes' goal of driving operational efficiency and optimizing its infrastructure to meet business needs efficiently.

Negative

• None.

Insights

Financial Analyst

The completion of Alkermes' sale of its Athlone facility to Novo Nordisk represents a strategic divestiture, freeing up capital and potentially improving Alkermes' cost structure. The one-time cash infusion of 91 million is notable, though it's paramount for investors to consider how these funds will be allocated. The company's assertive move towards operational efficiency could signify a focus on core competencies and streamline operations, likely to yield a long-term financial benefit beyond the immediate capital boost. However, it's essential to monitor how the loss of the facility's operational capacity might affect Alkermes' ability to scale their product production if demand increases. Investors should keep an eye on the company's future capital expenditures and any strategic reinvestment of these funds into R&D or other growth areas. The subcontracting arrangement ensures operational continuity in the near term, which is a prudent risk mitigation measure, maintaining the status quo of operating costs.

Market Research Analyst

Alkermes' decision to sell its manufacturing facility while retaining royalty revenues and establishing a subcontracting agreement with Novo Nordisk indicates a strategic pivot that could strengthen its focus on its core areas within neuroscience. For investors, this suggests a savvy anticipation of the company's infrastructure needs, likely to be perceived positively in terms of managerial foresight. The assurance of operational cost neutrality during the subcontracting period provides stability for the short-term financial outlook. Long-term, this move suggests a potential enhancement in profitability once the subcontracting period concludes. The impact of this transaction should be assessed within the broader context of the company's operational efficiency initiatives and could serve as a benchmark for evaluating Alkermes' ability to adapt its business model in an evolving pharmaceutical industry landscape.

DUBLIN, May 2, 2024 /PRNewswire/ -- Alkermes plc (Nasdaq: ALKS) has completed the previously announced sale of its development and manufacturing facility in Athlone, Ireland to Novo Nordisk. In connection with the closing of the transaction, Alkermes will receive a one-time cash payment for the facility and certain related assets of approximately $91 million.

"With the completion of the sale of the development and manufacturing facility in Athlone, Ireland, we delivered on a significant element of our multi-year program to drive operational efficiency and further align our infrastructure and cost framework with the anticipated needs of our business," said Richard Pops, Chief Executive Officer of Alkermes. "We are grateful to the Athlone team for their unwavering dedication and commitment over the years to manufacturing important medicines for patients around the world."

Alkermes and Novo Nordisk also entered into subcontracting arrangements to continue certain development and manufacturing activities currently performed at the facility for a period of time after closing of the transaction, which activities may continue through the end of 2025. This transaction is expected to be operating cost-neutral to Alkermes over the subcontracting period, and thereafter, the transaction is expected to yield significant operating cost benefit and contribute to enhanced profitability. Alkermes will continue to retain all royalty revenues associated with products currently manufactured at the facility. 

Alkermes will continue to manufacture its proprietary commercial products, VIVITROL^®, ARISTADA^®, ARISTADA INITIO^® and LYBALVI^®, at its Wilmington, Ohio manufacturing facility.

About Alkermes plc
Alkermes plc is a global biopharmaceutical company that seeks to develop innovative medicines in the field of neuroscience. The company has a portfolio of proprietary commercial products for the treatment of alcohol dependence, opioid dependence, schizophrenia and bipolar I disorder, and a pipeline of clinical and preclinical candidates in development for neurological disorders, including narcolepsy. Headquartered in Ireland, Alkermes also has a corporate office and research and development center in Massachusetts and a manufacturing facility in Ohio. For more information, please visit Alkermes' website at www.alkermes.com.

Note Regarding Forward-Looking Statements
Certain statements set forth in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including, but not limited to, statements concerning: the company's expectations concerning its future financial and operating performance, business plans or prospects, including anticipated operating costs and profitability. The company cautions that forward-looking statements are inherently uncertain. The forward-looking statements are neither promises nor guarantees and they are necessarily subject to a high degree of uncertainty and risk. Actual performance and results may differ materially from those expressed or implied in the forward-looking statements due to various risks and uncertainties, including those risks and uncertainties described under the heading "Risk Factors" in the company's Annual Report on Form 10-K for the year ended Dec. 31, 2023 and in subsequent filings made by the company with the U.S. Securities and Exchange Commission (SEC), which are available on the SEC's website at www.sec.gov. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except as required by law, the company disclaims any intention or responsibility for updating or revising any forward-looking statements contained in this press release.

VIVITROL^® is a registered trademark of Alkermes, Inc.; ARISTADA^®, ARISTADA INITIO^® and LYBALVI^® are registered trademarks of Alkermes Pharma Ireland Limited, used by Alkermes, Inc. under license.

Alkermes Contacts: 
For Investors:   Sandy Coombs    +1 781 609 6377
For Media:       Katie Joyce        +1 781 249 8927

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SOURCE Alkermes plc

FAQ

<p>What is the name of the company selling the Athlone, Ireland facility to Novo Nordisk?</p>

The company is Alkermes plc.

<p>What is the expected cost benefit for Alkermes post the completion of the transaction?</p>

The transaction is expected to yield significant operating cost benefits and contribute to enhanced profitability for Alkermes.

<p>What products will Alkermes continue to manufacture at its Wilmington, Ohio facility?</p>

Alkermes will continue to manufacture its proprietary commercial products, including VIVITROL®, ARISTADA®, ARISTADA INITIO® and LYBALVI® at its Wilmington, Ohio facility.