Attached files
| file | filename |
|---|---|
| 8-K/A - 8-K/A - Alkermes plc. | a15-9033_28ka.htm |
| EX-2.1 - EX-2.1 - Alkermes plc. | a15-9033_2ex2d1.htm |
Exhibit 99.1
ALKERMES PLC AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
On April 10, 2015, Alkermes plc (“Alkermes” or the “Company”) completed the sale of its manufacturing facility in Gainesville, GA, and the related manufacturing and royalty revenue associated with products manufactured at the facility (herein referred to as the “Gainesville facility”) to Recro Pharma, Inc. (“Recro” ) and Recro Pharma LLC (together with Recro, the “Purchasers”). Under the terms of the Purchase and Sale Agreement (the “Purchase Agreement”) entered into on March 7, 2015, the Purchasers made an initial cash payment of $50 million and issued warrants to purchase an aggregate of 350,000 shares of Recro common stock at a per share exercise price equal to $19.46, which was two times the closing price of Recro’s common stock on the day prior to closing. The Company’s subsidiary is also eligible to receive low double digit royalties on net sales of IV/IM and parenteral forms of Meloxicam and up to $120 million in milestone payments upon the achievement of certain regulatory and sales milestones related to IV/IM and parenteral forms of Meloxicam.
The following unaudited pro forma consolidated financial statements give effect to the divestiture as if it had been completed on January 1, 2014 for statement of operations purposes, and as if it had been completed on December 31, 2014 for balance sheet purposes, subject to the assumptions and adjustments as described in the accompanying notes. The unaudited pro forma consolidated financial statements were prepared in accordance with the regulations of the Securities and Exchange Commission (the “SEC”) and should not be considered indicative of the financial position or results of operations that would have occurred if the divestiture had been consummated on the dates indicated, nor are they indicative of the future financial position or results of operations of the Company.
In accordance with SEC regulations, the unaudited pro forma consolidated financial statements reflect adjustments to the extent they are directly attributable to the divestiture, factually supportable and, for statement of operations purposes, are expected to have a continuing impact on Alkermes’ operating results.
The unaudited pro forma consolidated financial statements are based upon and should be read in conjunction with the historical consolidated financial statements of Alkermes included in its Annual Report on Form 10-K for the year ended December 31, 2014.
ALKERMES PLC AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2014
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Pro Forma |
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Net Assets |
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Pro Forma |
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As Reported |
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Sold (a) |
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Adjustments |
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As Adjusted |
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(In thousands) |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
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$ |
224,064 |
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$ |
(1,500 |
) |
$ |
47,433 |
(b) |
$ |
269,997 |
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Investments — short-term |
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407,102 |
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— |
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— |
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407,102 |
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Receivables, net |
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151,551 |
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(9,696 |
) |
— |
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141,855 |
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Inventory |
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51,357 |
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(10,950 |
) |
— |
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40,407 |
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Prepaid expenses and other current assets |
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29,289 |
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(1,003 |
) |
(1,250 |
)(c) |
27,036 |
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Deferred tax assets — current |
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13,430 |
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— |
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(1,140 |
)(d) |
12,290 |
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Total current assets |
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876,793 |
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(23,149 |
) |
45,043 |
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898,687 |
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PROPERTY, PLANT AND EQUIPMENT, NET |
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265,740 |
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(38,607 |
) |
— |
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227,133 |
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INTANGIBLE ASSETS — NET |
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479,412 |
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(43,818 |
) |
— |
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435,594 |
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GOODWILL |
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94,212 |
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(1,347 |
) |
— |
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92,865 |
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INVESTMENTS — LONG-TERM |
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170,480 |
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— |
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2,123 |
(b) |
172,603 |
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OTHER ASSETS |
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34,635 |
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— |
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60,476 |
(b)(e) |
95,111 |
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TOTAL ASSETS |
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$ |
1,921,272 |
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$ |
(106,921 |
) |
$ |
107,642 |
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$ |
1,921,993 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable and accrued expenses |
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$ |
121,258 |
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$ |
(3,981 |
) |
$ |
— |
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$ |
117,277 |
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Long-term debt — short-term |
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6,750 |
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— |
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— |
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6,750 |
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Deferred revenue — short-term |
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2,574 |
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(462 |
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158 |
(f) |
2,270 |
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Total current liabilities |
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130,582 |
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(4,443 |
) |
158 |
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126,297 |
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LONG-TERM DEBT |
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351,220 |
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— |
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— |
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351,220 |
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DEFERRED TAX LIABILITIES, NET — LONG-TERM |
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18,918 |
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— |
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— |
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18,918 |
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DEFERRED REVENUE — LONG-TERM |
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11,801 |
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(3,692 |
) |
— |
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8,109 |
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OTHER LONG-TERM LIABILITIES |
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11,914 |
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— |
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— |
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11,914 |
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Total liabilities |
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524,435 |
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(8,135 |
) |
158 |
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516,458 |
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COMMITMENTS AND CONTINGENCIES |
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SHAREHOLDERS’ EQUITY: |
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Preferred stock |
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— |
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— |
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— |
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— |
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Ordinary shares |
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1,482 |
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— |
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— |
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1,482 |
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Treasury stock, at cost |
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(32,052 |
) |
— |
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— |
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(32,052 |
) | ||||
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Additional paid-in capital |
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1,942,878 |
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(81,011 |
) |
98,348 |
(g) |
1,960,215 |
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Accumulated other comprehensive loss |
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(3,136 |
) |
— |
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— |
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(3,136 |
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Accumulated deficit |
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(512,335 |
) |
(17,775 |
) |
9,136 |
(h) |
(520,974 |
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Total shareholders’ equity |
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1,396,837 |
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(98,786 |
) |
107,484 |
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1,405,535 |
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
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$ |
1,921,272 |
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$ |
(106,921 |
) |
$ |
107,642 |
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$ |
1,921,993 |
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The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.
ALKERMES PLC AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2014
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Pro Forma |
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As Reported |
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Adjustments |
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As Adjusted |
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(In thousands, except per share amounts) |
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REVENUES: |
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Manufacturing and royalty revenues |
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$ |
516,876 |
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$ |
(70,998 |
)(i) |
$ |
445,878 |
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Product sales, net |
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94,160 |
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— |
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94,160 |
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Research and development revenue |
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7,753 |
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(2,608 |
)(i) |
5,145 |
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Total revenues |
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618,789 |
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(73,606 |
) |
545,183 |
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EXPENSES: |
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Cost of goods manufactured and sold (exclusive of amortization of acquired intangible assets shown below) |
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175,832 |
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(37,085 |
)(i) |
138,747 |
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Research and development |
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272,043 |
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(4,375 |
)(i) |
267,668 |
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Selling, general and administrative |
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199,905 |
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(3,868 |
)(i) |
196,037 |
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Amortization of acquired intangible assets |
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58,153 |
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(5,001 |
)(i) |
53,152 |
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Total expenses |
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705,933 |
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(50,329 |
) |
655,604 |
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OPERATING LOSS |
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(87,144 |
) |
(23,277 |
) |
(110,421 |
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OTHER INCOME, NET: |
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Interest income |
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1,972 |
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— |
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1,972 |
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Interest expense |
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(13,430 |
) |
— |
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(13,430 |
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Gain on sale of property, plant and equipment |
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41,933 |
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— |
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41,933 |
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Gain on sale of investment in Civitas Therapeutics, Inc. |
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29,564 |
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— |
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29,564 |
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Gain on sale of investment in Acceleron Pharma Inc. |
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15,296 |
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— |
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15,296 |
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Other expense, net |
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(2,220 |
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— |
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(2,220 |
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Total other income, net |
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73,115 |
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— |
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73,115 |
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LOSS BEFORE INCOME TAXES |
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(14,029 |
) |
(23,277 |
) |
(37,306 |
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PROVISION FOR INCOME TAXES |
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16,032 |
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(3,201 |
)(j) |
12,831 |
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NET LOSS |
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$ |
(30,061 |
) |
$ |
(20,076 |
) |
$ |
(50,137 |
) |
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LOSS PER COMMON SHARE: |
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Basic and diluted |
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$ |
(0.21 |
) |
$ |
(0.14 |
) |
$ |
(0.35 |
) |
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WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: |
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Basic and diluted |
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145,274 |
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145,274 |
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The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.
ALKERMES PLC AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
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(a) |
Represents the assets and liabilities assumed by the Purchaser. |
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(b) |
Represents consideration paid by the Purchaser, including $50.0 million of cash; 350,000 warrants, with an estimated fair value of $2.1 million; and contingent consideration including future milestones and royalties with an estimated fair value of $58.9 million, less $2.6 million of transaction costs. |
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(c) |
Represents the elimination of prepaid state taxes and a short-term deferred tax charge of $0.3 million and $1.0 million, respectively, associated with the sale of the Gainesville facility. |
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(d) |
Represents the reversal of net current deferred tax assets of $1.1 million associated with the sale of the Gainesville facility. |
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(e) |
Represents the reversal of a $7.6 million long-term deferred tax charge and ($9.2) million of net long-term deferred tax liabilities associated with the sale of the Gainesville facility. |
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(f) |
Represents an allocation of $0.2 million of the $50.0 million cash received to deferred revenue for the Company’s future obligations under a clinical supply agreement with Recro. |
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(g) |
Represents the net impact of adjustments (b), (c), (d), (e), (f) and (h). |
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(h) |
Represents the estimated gain on the sale of the Gainesville facility if the facility was sold at December 31, 2014, calculated as follows (in thousands): |
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Cash proceeds |
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$ |
50,000 |
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Estimated fair value of warrants |
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2,123 |
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Estimated fair value of contingent consideration |
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58,900 |
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Net tangible assets and liabilities assumed by acquirer |
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(53,621 |
) | |
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Intangible assets assumed by the acquirer |
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(45,165 |
) | |
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Allocation of cash proceeds to clinical supply agreement |
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(158 |
) | |
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Transaction costs |
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(2,567 |
) | |
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Estimated tax on gain on sale of Gainesville facility |
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(376 |
) | |
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Gain on sale of Gainesville facility |
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$ |
9,136 |
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(i) |
Represents adjustments to eliminate the historical revenue and related operating expenses from the Company’s consolidated statement of operations. |
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(j) |
Represents the tax impact on the loss of pre-tax operating income generated by the Gainesville facility. |