Alkermes (ALKS) Q2-25 10-Q highlights: Net revenue slipped 2% YoY to $390.7 m as a 36% fall in manufacturing & royalty income (-$46.4 m) outweighed a 14% jump in proprietary product sales to $307.2 m. VIVITROL +9% to $121.7 m, ARISTADA franchise +18% to $101.3 m and LYBALVI +18% to $84.3 m.
Earnings & cash: Operating income from continuing ops declined 15% to $93.0 m; diluted EPS fell to $0.52 from $0.55. R&D spending rose 30% to $77.4 m while SG&A was flat. Lower royalties cut gross margin mix but cost-of-goods remained modest at 12.7% of sales. Operating cash flow rose 49% to $249.0 m, lifting cash & equivalents to $521.2 m (vs $291.1 m YE-24); no long-term debt remains, eliminating interest expense.
Balance sheet: Total assets grew to $2.25 bn; equity improved 11% to $1.62 bn. Share count fell 2% YoY to 165.1 m; $200 m of the $400 m buyback authorization is still available.
Key developments: • Royalty stream from long-acting INVEGA products continued to fade after August-24 U.S. expiry. • Medicaid rebate true-ups cut reserves by $30.1 m, aiding cash. • July-25 settlement with Zydus grants first generic VUMERITY entry only immediately prior to patent expiry. • New U.S. patent (12,311,027) extends ARISTADA protection to 2033.
Outlook: Management signals further revenue mix shift toward proprietary brands, higher R&D for pipeline assets (e.g., alixorexton), and materially higher operating cash following recent U.S. tax law changes.