The company reported second-quarter revenue Wednesday that included $248.4 million of back royalties and associated interest related to the successful outcome of an arbitration case with J&J’s Janssen.
Pictured: Gavel with cash bills/Courtesy iStock, alfexe
Alkermes received a $248.4 million boost from Johnson & Johnson in the second quarter after winning its arbitration case against the drugmaker.
J&J paid Alkermes the money to cover back royalties and interest as a result of arbitration proceedings that wrapped up in late May. The payment included $195.4 million related to long-acting Invega, a set of schizophrenia drugs sold by J&J. Alkermes provided technology for Invega and other products, only for J&J to try to partially terminate their deal on the grounds it no longer used the intellectual property.
Talking to investors on a Wednesday conference call to discuss the financial results, Alkermes CFO Iain Brown listed the money from J&J’s Janssen as a key factor in the jump in sales to $617.4 million in the second quarter.
“Our second quarter results reflect strong execution across our business, highlighted by the 21% year-over-year growth of our three proprietary commercial products and reinstatement of the long-acting Invega royalties in the U.S. following our success in the arbitration with Janssen,” Brown said.
The future growth of Alkermes is tied, in part, to another legal case. A decision on a patent litigation suit with Teva Pharmaceuticals is due in the second half of the year. Teva claims a patent that could protect Alkermes’ alcohol use disorder and opioid dependence drug Vivitrol until 2029 is invalid and, as such, will not be infringed if it starts selling a generic copy.
Vivitrol sales grew 6% to $102.1 million in the second quarter, keeping the product on track to generate between $380 million and $410 million for Alkermes this year. The drug accounted for around one-sixth of total sales in the quarter and Alkermes is confident it will remain an important product even if it loses the patent case, as Todd Nichols, the company’s chief commercial officer, told analysts on the earnings call.
“We have complex manufacturing, the fulfillment channels are complex, the settings of care are complex and there’s not one setting that actually dominates the market. Anyone coming into the market would have to have a deep understanding of how to commercialize,” Nichols said. “We believe we are well positioned to continue to drive Vivitrol and also defend if a competitor came into the market.”
Alkermes expects its Vivitrol go-to-market strategy to be unchanged in 2023 and 2024. An appeal of the initial patent ruling is possible, which would start a new legal cycle and delay the arrival of generic competition, and Alkermes expects Vivitrol to remain a key product for the foreseeable future.
Nick Paul Taylor is a freelance pharmaceutical and biotech writer based in London. He can be reached on LinkedIn.
