— Alkermes will focus on profitable growth of its purely commercial-stage neuroscience business —
— The separation is expected to unlock value as it provides a clearer strategic focus, simplified capital allocation decisions and a clearer investment profile.
— Company hosting today’s webcast 8:00 a.m. Eastern Standard Time —
Dublin, November 2, 2022 /PRNewswire/ — Alkermes plc (Nasdaq: ALKS) today announced approval by its Board of Directors (Board of Directors) to consider the separation of its commercial-stage neuroscience and development-stage oncology businesses. The company, with its board of directors and outside financial and legal counsel, will consider separating its oncology business into a separate, publicly traded company (Oncology Co.) as part of its ongoing review of strategic alternatives to its oncology business. is.
Alkermes believes that the separation of its oncology business into Oncology Co. will:
- Drive a clear strategic focus for each business.
- Establish separate and individualized management teams with relevant therapeutic expertise based on each business’s unique strategic priorities and opportunities.
- Simplify capital allocation decisions and increase flexibility to pursue growth and investment strategies that more directly align with the respective goals of each business.When
- Allowing the capital markets to better assess the value, performance and potential of each business, and attracting the long-term shareholder base that each business deserves.
“Alkermes continues to build on its tradition of innovation and excellence in neuroscience. With a strong top line, our standalone Neuroscience business is an attractive opportunity to gain operating leverage, drive growth and profitability, and advance new potential medicines for neurological disorders,” said Richard Popps, Alkermes. said the executive. “With nemvaleukin currently in two potential registries, the oncology business has a compelling case underpinned by the potential medical and economic value of this potential first-in-class cancer treatment. We have an independent investment thesis, and we believe the separation of the oncology business is the best support at this time, positioning nemvaleukin for success, creating value for shareholders, and prior to engineered cytokines. It enables efficient advancement of the clinical pipeline.”
Expected Business Profile:
Alkermes: A Profitable Pure Commercial-Stage Neuroscience Company
Alkermes remains focused on driving the critical unmet need in neuroscience and the growth of its own commercial product, LYBALVI.®Aristada®/Aristoda Inicio® Vivitrol®The company will also focus on advancing development of pipeline programs focused on neurological disorders, including ALKS 2680, an orexin 2 receptor agonist for the treatment of narcolepsy. Alkermes intends to retain manufacturing and royalty income related to licensed products and third-party products that use its proprietary technology under license. Alkermes is expected to benefit from improved profitability and continued balance sheet strength following the separation of its oncology business. Richard Pops will continue as Chief Executive Officer and Chairman of Alkermes.
Oncology Co.: A pure development stage oncology company
The Oncology business remains focused on cancer treatment discovery and development. This includes the continued development of nemvaleukin alfa (nemvaleukin), a novel interleukin-2 (IL-2) variant immunotherapy in development. Nemvaleukin now has potential registration to enable study in two difficult-to-treat tumor types: platinum-resistant ovarian cancer and mucosal melanoma. By selectively targeting the IL-2 pathway, nemvaleukin has broad potential clinical utility in a wide variety of tumor types, offering significant value creation potential as the development program progresses. Assets targeted for isolation are also expected to include a portfolio of novel preclinical engineered cytokines, including tumor-targeted split interleukin 12 (IL-12) and interleukin 18 (IL-18) .
“The potential separation of the oncology business from Alkermes’ neuroscience business will provide a platform to improve the performance of both businesses and unlock shareholder value. As , with their respective value propositions looking forward, the Board unanimously agreed that the unique needs of each business included simplified resource and capital allocation decisions, coordinated business structures, and agree that it can best be served by a well-defined leadership team, each with a clearly defined strategic focus.” Nancy WisenskiLead Independent Director of the Alkermes Board of Directors.
Process and strategic rationale
In 2020, the Board will work closely with management and external financial and legal advisors to develop a broad range of potential strategies for our non-core assets, including evaluating strategic partnerships and other opportunities for our oncology business. We have started evaluating potential options. With nemvaleukin proceeding to potential registrations and enabling research and recent developments across the healthcare industry, the Board and management believe that separating the oncology business at this time will be the best option for patients, shareholders and other major stakeholders. We believe that it is in the best interest of our stakeholders.
In preparation for the potential separation, Alkermes will continue to carefully manage the cost structure of each business. The company expects to incur transaction and separation costs as part of the process of separating and transitioning the two businesses. Alkermes will provide additional financial information at a later date.
Migration and Timing
Additional details regarding the separation, including the name of the proposed Oncology Co., management team, board of directors, and financial details of the two proposed companies, will be provided at a later date. The split, if complete, is expected to close in the second half of 2023. Alkermes expects Oncology Co. to be located on the company’s existing premises. Waltham, Massachusetts campus.facilities and research and manufacturing operations Wilmington, Ohio and Athlon, Ireland Remain in Alkermes.
The separation of the two businesses is subject to customary closing conditions and final approval by Alkermes’ Board of Directors. There is no guarantee of the final timing or structure of any planned separation or that separation will ultimately occur.
Morgan Stanley and BofA Securities are Alkermes, Goodwin Procter LLP and Arthur Cox I am its legal advisor.
Alkermes plc is a fully integrated global biopharmaceutical company that develops innovative medicines in the fields of neuroscience and oncology. The company has a unique portfolio of commercial products focused on alcoholism, opioid addiction, schizophrenia and bipolar I disorder, and a pipeline of developmental product candidates in neurological disorders and cancer. . Alkermes is headquartered in Dublin, Ireland, with an R&D center in Waltham, Massachusetts. Research and manufacturing facility in Athlone, Ireland. Manufacturing facility in Wilmington, Ohio. For more information, please visit Alkermes’ website at www.alkermes.com.
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this press release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. This includes, but is not limited to, statements regarding: Oncology business, including expected split timing, structure, benefits and costs. The company’s expectations regarding its business profile and future financial and operating results, business plans or prospects if the two businesses are separated. These include assumptions about growth and profitability, commitments and plans to enhance shareholder value, and ability to execute the business. Address each of your strategic priorities and move your development program forward. and the potential therapeutic and commercial value of the company’s products. The company cautions that forward-looking statements are inherently uncertain. Forward-looking statements are neither promises nor guarantees and are necessarily subject to a high degree of uncertainty and risk. Actual performance and results may differ materially from those expressed or implied by forward-looking statements due to various risks and uncertainties. These risks and uncertainties include, among others: The company may not divest its oncology business eventually or at all during 2023. Unforeseen developments, costs or difficulties that may delay or adversely affect the potential for separation. disruption of the company’s operations due to possible separation; The Company may not be able to make the necessary changes in a timely or cost-effective manner to operate its Neuroscience and Oncology businesses separately. A potential separation or announcement thereof could adversely affect the company’s ability to attract or retain key personnel. A company’s efforts to control its cost structure may not yield the intended results. The company may not achieve its long-term profitability or profitability goals in a timely manner or at all. The impact of the ongoing COVID-19 pandemic on the company’s business, results of operations, or financial condition. This includes impacts on healthcare systems and impacts on patient and healthcare provider access to the company’s marketed products. Adverse outcome of arbitration or lawsuits, including so-called “Paragraph IV” lawsuits and other patent litigation, or other disputes relating to Company products or products using Company proprietary technology, including arbitration proceedings with Janssen; Development activities may not complete on time or may not complete at all. The results of the company’s development activities may not be positive or predictive of the final results of such activities, the results of future development activities or real-world results. The U.S. Food and Drug Administration (FDA) may disagree with a company’s regulatory approval strategy or the components of a company’s marketing application. The FDA or regulatory agencies outside the United States may make adverse decisions regarding our products. The Company and its licensees may not be able to successfully commercialize the Products. There may be a decrease in payment or reimbursement rates for the company’s products, or an increase in the company’s financial obligations to government payers. Our products may prove difficult to manufacture, be prevented from commercialization by third party proprietary rights, or experience unintended side effects, adverse reactions or misuse.and the risks and uncertainties identified under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended. December 31, 2021 In addition, subsequent filings made by the Company with the U.S. Securities and Exchange Commission (SEC) will include the Company’s quarterly report on Form 10-Q for the quarter ended. September 30, 2022These are available on the SEC’s website at www.sec.gov. Current and prospective investors are cautioned not to place undue reliance on these forward-looking statements. Except as required by law, we disclaim any intention or responsibility to update or revise any forward-looking statements contained in this press release.
Vivitrol® is a registered trademark of Alkermes, Inc. and ARISTADA.®Aristoda Inicio® and rebalbi® Registered trademark of Alkermes Pharma Ireland Limited, used under license by Alkermes, Inc.
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