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FACTS: Alkermes (ALKS) upgraded its FY guidance after a strong Q3 out-turn. Elan is a 25% shareholder.
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ANALYSIS: The quarter included the first full quarterly contribution from EDT, acquired from Elan in September 2011. Revenues rose from $44m to $125.6m, while adjusted EBITDA surged from a loss of $4.1m to a profit of $29.7m.
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Growth was driven by sales, manufacturing revenue and royalties from ALKS’ five key products and also from a robust performance from its mature products portfolio:
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Its long-acting antipsychotics (Risperdal Consta, Invega Sustenna/Xeplion) reported revenue growth of 35% to $47.6m.
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Amypra contributed $10.2m (added as part of EDT transaction).
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Vivitrol grew by 38% to $10.6m.
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Bydureon contributed $0.3m after its launch in some EU countries in the second half of calendar 2011.
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ALKS also provided updated guidance for the year ending March 2012. The revenue range was increased from $350-380m to $370-400m. Adjusted EBITDA was increased similarly from $45-55m to $65-75m.
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DAVY VIEW: The integration of EDT has started successfully, as reflected in strong Q3 results and upgraded FY guidance. Strong growth in key products and several data read-outs on its pipeline during 2012 bode well for the stock. The shares broke above $19 post results, putting a value on Elan's shareholding of approximately $615m.
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