Those shares received another jolt this past week, when Alkermes and partner Amylin Pharmaceuticals said their experimental diabetes drug Bydureon does not affect electrical activity of the heart, a key safety concern. That greatly improves the drug’s chances of getting the go-ahead from US regulators.
With the Elan deal, investors have been warm from the start. By obtaining the 400-person unit of Elan, Alkermes is putting together a portfolio of 25 commercial products, five of which have potential to be cash cows well into the 2020s.
The “new’’ Alkermes is supposed to be consistently profitable, have more than $450 million in annual revenue, and offer a diversified lineup of products that can help protect it from any potential hiccups (regulatory, commercial, manufacturing, or other) that can damage a company which counts on just one or two drugs.
Ultimately, it’s about taking the company up a notch, into the league of Big Biotechs, where investors care not just about scientific “blue-sky’’ possibilities, but also how much money you can make each year, and how durable all the legs really are on the company stool.
“At first blush, Wall Street’s reaction was ‘Aha, I get it; it’s financially transformative,’ ’’ Pops said during a lunch meeting a couple of weeks ago in downtown Boston. “You go from a money-losing biotech company to one that’s growing revenues, growing margins, growing cash flows for a long time.’’
The acquisition of Elan Drug Technologies, which will technically reincorporate Alkermes into a Dublin-based company, still has to pass a vote of shareholders, which is expected sometime before the end of September. But no real opposition has emerged.
