Alkermes plc (NASDAQ:ALKS) is a biopharmaceutical company that focuses on developing innovative medicines for central nervous system disorders and oncology. The company operates in a competitive landscape with peers like Neurocrine Biosciences, Inc. (NBIX), Alnylam Pharmaceuticals, Inc. (ALNY), BioMarin Pharmaceutical Inc. (BMRN), Incyte Corporation (INCY), and Nektar Therapeutics (NKTR).
Alkermes showcases a robust Return on Invested Capital (ROIC) of 22.09%, significantly surpassing its Weighted Average Cost of Capital (WACC) of 6.71%. This results in a ROIC to WACC ratio of 3.29, indicating that Alkermes is effectively using its capital to generate returns well above its cost of capital.
In comparison, Neurocrine Biosciences has a ROIC of 12.66% and a WACC of 5.96%, leading to a ROIC to WACC ratio of 2.12. While this is a positive indicator of capital efficiency, it still falls short of Alkermes' performance. Neurocrine's ability to generate returns above its cost of capital is commendable but not as pronounced as Alkermes.
Alnylam Pharmaceuticals, with a negative ROIC of -4.21% against a WACC of 6.21%, results in a ROIC to WACC ratio of -0.68. This suggests that Alnylam is currently not generating returns above its cost of capital, highlighting a potential area for improvement in capital utilization.
BioMarin Pharmaceutical and Incyte Corporation also show lower ROIC to WACC ratios of 0.75 and 0.02, respectively. These figures indicate that while they are generating some returns, they are not significantly above their cost of capital. Nektar Therapeutics, with a ROIC of -51.91% and a WACC of 12.70%, has a concerning ROIC to WACC ratio of -4.09, suggesting significant challenges in capital efficiency.
