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Investing.com - Alkermes (NASDAQ:ALKS) shares fell Monday after BofA Securities maintained its Neutral rating and $35.00 price target following the company’s Phase 2 trial results for its narcolepsy treatment. According to InvestingPro data, the company maintains strong fundamentals with a "GREAT" financial health score and holds more cash than debt on its balance sheet.
The pharmaceutical company reported topline results from its Vibrance-1 study, which evaluated ALKS2680, an orexin-receptor 2 agonist, in patients with narcolepsy type 1. The approximately 90-patient study demonstrated clinically meaningful and nominally statistically significant improvements in key efficacy measures, including the Maintenance of Wakefulness Test and Epworth Sleepiness Scale. With a robust gross profit margin of 84% and healthy return on equity of 26%, Alkermes has demonstrated strong operational efficiency.
Despite these positive efficacy signals, BofA Securities noted the press release provided limited details on effect size and safety profile, leaving several important questions unanswered until more comprehensive data is presented at the World Sleep conference in September.
Key outstanding questions identified by BofA include the strength of cataplexy data, clarity on visual disturbance adverse events, and how ALKS2680’s profile compares competitively against TAK-861, a competing narcolepsy treatment.
Alkermes stock underperformed broader pharmaceutical indices on Monday, declining 4% compared to a 2% drop in the Drug Index (DRG), which BofA attributed to the limited data disclosure in the company’s announcement. InvestingPro analysis suggests the stock is currently undervalued, with analyst targets ranging from $30 to $52. Discover more detailed insights and 8 additional ProTips about Alkermes in the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Alkermes has announced positive results for its narcolepsy treatment, alixorexton, in a Phase 2 clinical trial. The drug demonstrated statistically significant improvements in wakefulness and excessive daytime sleepiness for patients with narcolepsy type 1. Following these results, the company plans to advance the drug to a global Phase 3 program. Stifel has reiterated its Buy rating for Alkermes, maintaining a $42.00 price target, citing the favorable trial outcomes and the drug’s safety profile. Additionally, Goldman Sachs has initiated coverage on Alkermes with a Buy rating and a $43.00 price target, highlighting the potential growth from its orexin receptor 2 agonist portfolio. UBS has also upgraded Alkermes from Neutral to Buy, raising its price target from $33.00 to $42.00, based on the promising outlook for ALKS-2680 in treating narcolepsy and idiopathic hypersomnia. The firm sees potential for ALKS-2680 to become a significant player in the sleep disorder market. These developments underscore growing investor confidence in Alkermes’ future prospects.
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