Alkermes hikes up 2023 financials by $425M after Invega license fight win against J&J

Alkermes is flying high into the second half of 2023 with its updated yearly guidance, thanks in part to back royalties and interest from an arbitration case with Johnson & Johnson’s Janssen.

Alkermes raised its financial expectations for the year by about $425 million after an arbitral tribunal ruled in favor of Alkermes in June in a licensing fight between the two companies. The back royalties and interest come from 2022 net sales of the Invega products for schizophrenia and 2023 royalty revenues from the same year’s global net sales.

Total revenues for Alkermes were $617.4 million, a jump from $276.2 million in the second quarter last year. Of the $617.4 million, $248.4 million comes from the back royalties and interest.

Iain Brown

Iain Brown, CFO of Alkermes, said in a statement that the company expects royalty revenues for the long-acting Invega products to be “incrementally accretive” to the company’s bottom line this year and in the future.

“We are in a strong financial position with more than $907 million of cash and total investments,” Brown said. “Today, we are reiterating our financial expectations for 2023 that were provided in June following receipt of the favorable final award in our arbitration with Janssen,” he added.

The fight between Janssen and Alkermes began in 2021 over two license agreements from 1999 and 2003, although Alkermes didn’t initiate arbitration until 2022, according to court documents. J&J tried to partially back out of two licensing agreements for Alkermes’ nanoparticle technology, which the pharma giant claimed it wasn’t using. The deal stipulated that J&J could end the agreement, but it couldn’t also continue to sell the products.

In 2021, J&J contended that it hadn’t used the nanoparticle technology in the drugs. Alkermes CEO Richard Pops disagreed, and Endpoints News found that summaries of the drugs on Janssen’s website did include a reference to the usage of nanoparticle technology.

“For years, Janssen has highlighted the use of our NanoCrystal technology in its long-acting INVEGA products and has paid us know-how royalties consistent with this fact,” Pops said in a statement at the time. “We are not aware of any changes that have occurred to these products that would have altered their use of our intellectual property.”

According to SEC filings, under the license agreement, Alkermes was receiving tiered patent and know-how royalties between 3.5% and 9% of Invega Sustenna/Xeplion and Invega Trinza/Trevicta sales in multiple countries.

In the final arbitration, the panel awarded Alkermes back royalties of approximately $194 million based on US sales, including interest through March 13 of this year. It also includes a separate royalty term for three products: Invega Sustenna through Aug. 20, 2023, Invega Trinza through the second quarter of 2030, and Invega Hayfera through May 2030.

Royalties for Cabenuva in the US are owed until Dec. 31, 2036.

sell
pharma