Alkermes (ALKS) Regains Full Commercial Rights to VIVITROL(R) in US; Updates FY09 Outlook

December 1, 2008 9:04 AM EST

Alkermes, Inc. (NASDAQ: ALKS) today announced that it has regained from Cephalon, Inc. (Nasdaq: CEPH) full commercialization rights to VIVITROL(R) in the U.S. following a portfolio review by Cephalon. The collaboration between the two companies will terminate effective December 1, 2008. VIVITROL, the first and only long-acting injectable medication commercially available for the treatment of alcohol dependence, is also being developed by Alkermes as a potential treatment for opioid dependence.

Cephalon will pay Alkermes $11 million to cover its share of the estimated losses on VIVITROL for the next 12 months and Alkermes will pay Cephalon $16 million to purchase manufacturing equipment for the product. Alkermes will recognize remaining milestone revenue and deferred revenue of approximately $120 million related to its previous agreements with Cephalon as net collaborative profit in the third quarter of fiscal 2009. Further terms of the agreement were not disclosed.

In a Form 8-K, Alkermes issued an updated FY09 outlook. The company now sees FY09 manufacturing sales related to VIVITROL down from $7-$11 million to $2-$4 million. Its total sales for the year move from $200-$225 million to $320-$346 million, versus the Street estimate of $217.12 million. GAAP EPS for the year are now expected to be $1.41-$1.53, from $0.20-$0.25 previously.

Alkermes, Inc., a biotechnology company, develops, and manufactures extended-release injectable, pulmonary, and oral products for the treatment of prevalent, chronic diseases, such as central nervous system disorders, addiction, and diabetes.

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