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Alkermes (ALKS) Q4 FY25 earnings call: guidance and Q&A

Earnings call· Dec 2025 (Q4 FY25)· Health Care· Feb 25, 2026

Source: earnings call transcript

Executive summary

Alkermes Q4 FY25 — Strong Commercial Performance and Orexin Pipeline Advancement

Alkermes delivered a strong Q4 FY25, marked by robust proprietary product growth and the strategic acquisition of Avadel, significantly expanding its commercial footprint into sleep medicine. The company is advancing its promising orexin pipeline, with alixorexton entering Phase III for narcolepsy and other candidates progressing for ADHD and neurodegenerative fatigue. This positions Alkermes for continued growth and value creation, underpinned by a resilient commercial portfolio and a deep pipeline.

Highlights

5

  • Proprietary product net sales grew 9% year-over-year to approximately $1.2 billion in FY25.

  • LYBALVI net sales grew 24% year-over-year to $346.7 million in FY25, driven by 24% underlying TRx growth.

  • LUMRYZ generated approximately $279 million in net sales in FY25, with patient count increasing roughly 40% to 3,500 by year-end.

  • Alixorexton received FDA Breakthrough Therapy Designation and is on track to initiate Phase III in narcolepsy in Q1 2026.

  • FY25 adjusted EBITDA reached $394 million, reflecting strong profitability.

Concerns

5

  • FY25 VIVITROL results included approximately $27 million of gross to net favorability not expected to recur in 2026.

  • FY25 ARISTADA results included approximately $14 million of gross to net favorability not expected to recur in 2026.

  • LYBALVI gross to net adjustments are expected to widen into the mid-30s starting Q1 2026.

  • Scheduled expiration of certain XEPLION royalties will impact manufacturing and royalty revenues in H2 2026.

  • A non-cash inventory step-up charge of approximately $150 million related to LUMRYZ will be expensed in 2026.

Guidance & targets

CategoryTargetConfidence
Total revenues
$1.73 billion to $1.84 billion
high materiality
High
Proprietary product net sales
$1.52 billion to $1.6 billion
high materiality
High
Manufacturing and royalty revenues
$210 million to $240 million
medium materiality
High
Cost of goods sold
$365 million to $385 million
medium materiality
High
R&D expenses
$445 million to $485 million
medium materiality
High
SG&A expenses
$890 million to $930 million
medium materiality
High
Amortization of intangible assets
$95 million to $105 million
low materiality
High
Net interest expense
$75 million to $85 million
low materiality
High
Net tax benefit
approximately $20 million
low materiality
High
GAAP net loss
$115 million to $135 million
medium materiality
High
EBITDA
$60 million to $90 million
medium materiality
High
Adjusted EBITDA
$370 million to $410 million
high materiality
High
Proprietary commercial product net sales
$310 million to $330 million
medium materiality
High
Royalty and manufacturing revenues
$40 million to $45 million
low materiality
High
Cost of goods sold sequential increase
approximately $20 million
low materiality
High
R&D expenses
$110 million to $125 million
medium materiality
High
SG&A expenses
$230 million to $250 million
medium materiality
High
Adjusted EBITDA
$30 million to $50 million
medium materiality
High
VIVITROL net sales
$460 million to $480 million
medium materiality
High
ARISTADA net sales
$365 million to $385 million
medium materiality
High
LYBALVI net sales
$380 million to $400 million
medium materiality
High
LUMRYZ total revenue
$350 million to $370 million
high materiality
High
LUMRYZ net sales (remainder of FY26)
$315 million to $335 million
high materiality
High
sNDA submission for LUMRYZ in IH
potential launch in early 2028
medium materiality
Medium
ALKS 7290 Phase II program initiation
expected to begin in the second half
medium materiality
High
ALKS 4510 Phase II program initiation
expected to begin in the second half
medium materiality
High
ALKS 7290 Phase Ib study data in ADHD
expected in the second half of the year
medium materiality
High
ALKS 7290 Phase II study initiation in ADHD
expect to initiate a Phase II study in the second half of the year
medium materiality
High
ALKS 4510 Phase IIa study initiation in MS/Parkinson's fatigue
planning to initiate a multi-dose Phase IIa study this year
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
VIVITROL
Performance driven by growth in the alcohol dependence market and localized market dynamics. FY25 results included non-recurring gross to net favorability.
Net sales: $467.9 millionYoY growth: 2%FY25 gross to net favorability: ~$27 million (not recurring in 2026)
$467.9 million2%——
ARISTADA
Growth supported by expanded psychiatry sales force, increased call frequency, and effective execution. FY25 results included non-recurring gross to net favorability.
Net sales: $370 millionYoY growth: 7%FY25 gross to net favorability: ~$14 million (not recurring in 2026)Expanding prescriber breadthHealthy persistencyStrong new-to-brand prescriptions
$370 million7%——
LYBALVI
Strong growth driven by new patient starts, prescriber expansion, and improved payer access. Gross to net adjustments expected to widen in 2026.
Net sales: $346.7 millionYoY growth: 24%Underlying TRx growth: 24% YoYGross to net adjustments (FY25): ~29%Sustained momentum in new patient startsContinued expansion in prescriber breadthImproved payer access
$346.7 million24%——
LUMRYZ
Launched in 2023, LUMRYZ is a once-at-bedtime sodium oxybate for narcolepsy, addressing a significant unmet need. Strong uptake and patient growth observed.
Net sales (FY25): $279 millionPatients on therapy (end 2025): 3,500Patient increase (Q4 2024 to Q4 2025): ~40%Estimated oxybate-eligible patients: 50,000Commercial payer access: >90%
$279 million———
Manufacturing and Royalty Revenues
Includes revenues from VUMERITY and INVEGA products. VUMERITY manufacturing obligations completed in 2025; future revenues solely from royalties. Scheduled expiration of XEPLION royalties expected in H2 2026.
Total revenues (FY25): $291.3 millionVUMERITY revenues (FY25): $130.5 millionLong-acting INVEGA products revenues (FY25): $109.6 million
$291.3 million———

ALKS operating KPIs by quarter

ALKS operating KPIs stated on its earnings calls, by fiscal quarter
KPIThis call Dec 2025 Q4 FY25 Mar 2026 Q1 FY26 Jun 2026 Q2 FY26Change vs prior quarter
Patients LUMRYZ
~3,500 In 2025, LUMRYZ generated approximately $279 million in net sales, with approximately 3,500 patients on LUMRYZ therapy as of the end of 2025, a roughly 40% increase in number of patients from the fourth quarter of 2024. Source: earnings call transcript
~3,600 We exited the quarter with approximately 3,600 patients on therapy and with solid momentum in new patient enrollments, which we expect to build on as we move through the year. Source: earnings call transcript
~3,900 We exited the quarter with approximately 3,900 patients on therapy. Source: earnings call transcript
—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

Avadel Pharmaceuticals Acquisition of Avadel, adding LUMRYZ and its commercial platform, accelerating entry into sleep medicine market. $775 million cash, $1.525 billion term loans

Acquisition closed in February 2026. Used approximately $775 million of cash from balance sheet and entered into term loans totaling $1.525 billion due in 2031.

Risks & headwinds

Non-recurring gross to net favorability FY26

$27 million for VIVITROL, $14 million for ARISTADA

Mitigation:Not explicitly stated, but implies focus on underlying demand and market execution.

Widening gross to net adjustments for LYBALVI Starting Q1 FY26

widening into the mid-30s

Mitigation:Strategic expansion of payer access to support broader adoption.

Expiration of XEPLION royalties Second half of FY26

scheduled expiration

Mitigation:Not explicitly stated, but company is focused on proprietary product growth.

Non-cash inventory step-up charge from Avadel acquisition FY26

$150 million

Mitigation:This is an accounting charge, not a cash outflow. Management expects to maintain a strong cash flow positive profile.

Potential generic entry for VIVITROL 2027

difficult product to commercialize and manufacture

Mitigation:Preparing for multiple scenarios, including competition. Will be prepared to compete and adjust spend if needed.

Competitive entry in narcolepsy market (e.g., Takeda's oveporexton) FY26

another market entrant by year-end

Mitigation:LUMRYZ is uniquely positioned as the only once-nightly oxybate. Alkermes will watch pricing dynamics and position LUMRYZ accordingly. Sales force is rightsized for current market.

What to watch in Q1 FY26

LUMRYZ REVITALIZE Phase III data in IH

Q2 FY26
Current Study ongoing
Target Positive data readout

Why it matters

Positive data could lead to sNDA submission and expand LUMRYZ's market opportunity into idiopathic hypersomnia, a significant unmet need.

We also expect to have data from the REVITALIZE Phase III study of LUMRYZ in patients with idiopathic hypersomnia in the second quarter.

Find out whether ALKS delivers this. Inve re-checks your case every morning.

Q&A highlights

How will split dosing for alixorexton affect the AE profile, potentially reducing or increasing adverse events, given the goal to boost efficacy?

Management stated that orexin 2 receptor agonists generally have a favorable and safe AE profile. The split dosing is modeled to extend wakefulness duration for patients desiring it, with a very similar AE profile to the once-daily dose, maximizing later wakefulness while minimizing side effects.

“The way we model the split doses is in order to drive those later hours of wakefulness for those patients who want an extended duration of wakefulness with a very similar AE profile.”

asked by Joseph Thome · answered by Richard F. Pops

3 min read 7 chapters

Detailed narrative

Commercial Business Strength and Avadel Acquisition

Alkermes reported strong FY25 financial results, with proprietary product net sales growing 9% year-over-year to approximately $1.2 billion. The recent acquisition of Avadel, which closed in February 2026, significantly strengthens the commercial platform by adding LUMRYZ and accelerating Alkermes' entry into the sleep medicine market. This strategic move is expected to contribute meaningfully to future revenue and growth, with LUMRYZ projected to generate $350 million to $370 million in total revenue for FY26.

Alixorexton Development and Breakthrough Therapy Designation

Alixorexton, Alkermes' most advanced orexin candidate, is poised to enter Phase III in narcolepsy in Q1 2026, following a rigorous Phase II program and the recent grant of FDA Breakthrough Therapy Designation. The end-of-Phase II meeting with the FDA confirmed the registration plan, which includes three 12-week randomized, placebo-controlled studies across narcolepsy type 1 and type 2. The program will feature both once-daily and split-dosing regimens, aiming to differentiate the product and address unmet needs in central disorders of hypersomnolence.

Orexin Pipeline Expansion

Beyond alixorexton, Alkermes is advancing other orexin 2 receptor agonist candidates, ALKS 7290 and ALKS 4510, both currently in Phase I studies. ALKS 7290 is being developed for ADHD, with plans to initiate a multi-dose Phase Ib study in adult patients and a Phase II study in H2 2026, targeting a significant unmet need. ALKS 4510 is being developed for fatigue associated with neurodegenerative disorders like MS and Parkinson's, with a Phase IIa study expected to initiate in 2026. These programs represent a new vertical of growth and expansion in neuroscience.

LUMRYZ Performance and IH Opportunity

LUMRYZ, acquired through Avadel, generated approximately $279 million in net sales in FY25 and treated about 3,500 patients by year-end, a 40% increase from Q4 2024. The product, a once-at-bedtime sodium oxybate for narcolepsy, addresses a significant unmet need, with an estimated 50,000 oxybate-eligible patients. Alkermes also expects data from the REVITALIZE Phase III study of LUMRYZ in idiopathic hypersomnia (IH) in Q2 2026, which, if positive, could lead to an sNDA submission and potential launch in early 2028, expanding its market reach.

Leadership Transition

Richard Pops announced his transition from CEO to Chairman, with current Chief Operating Officer Blair Jackson assuming the CEO role this summer. This leadership change comes at a time of significant strength and growth for the company, following the successful transformation into a proprietary products company and the advancement of a promising pipeline. The transition is described as a logical step, with confidence in continued momentum and value creation under new leadership.

Oxybate vs. Orexin Agonists Co-Treatment

Management clarified that orexin agonists primarily address wakefulness, while oxybates target fragmented nighttime sleep. While orexin agonists may suffice for many patients, a cohort could benefit from both, especially those needing consolidated nighttime sleep. Alkermes, now with assets in both categories (LUMRYZ and alixorexton), plans to generate data for payers to support the value of co-treatment for specific patient populations, viewing this as an evidence-building pathway rather than a registrational one.

ADHD and Neurodegenerative Fatigue Market Opportunities

The company sees significant potential in ALKS 7290 for ADHD, noting its preclinical profile showing efficacy across concentration and impulsivity domains, potentially offering a new therapeutic option beyond stimulants and non-stimulants. For ALKS 4510, targeting fatigue in MS and Parkinson's, the large patient populations (1 million each in the U.S.) represent a substantial opportunity, with the current Phase I studies paving the way for Phase IIa initiation this year.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.