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Stifel maintained its Buy rating and $42.00 price target on Alkermes (NASDAQ:ALKS), representing a 43% upside from the current price of $29.42, ahead of upcoming clinical trial results for its narcolepsy treatment. According to InvestingPro data, the company maintains a "GREAT" Financial Health score of 3.53 out of 5, with analysts’ targets ranging from $30 to $52. The investment firm expects data from ALKS2680’s type 1 narcolepsy (NT1) trial in early third quarter.
The firm noted that while investors largely anticipate positive NT1 results, safety and tolerability data will be crucial factors to watch. Specific concerns about visual disturbances with ALKS2680 are "probably overdone," according to Stifel’s analysis. The company’s strong financial position, with more cash than debt on its balance sheet and a current ratio of 3.33, provides stability during this critical development phase.
Stifel’s investment thesis centers on expectations that ALKS2680 will succeed not only in NT1 but also in other orexin-related sleep disorders like type 2 narcolepsy (NT2) and idiopathic hypersomnia. The company plans to release NT2 trial data this fall. With an impressive gross profit margin of 84.4% and positive earnings over the last twelve months, Alkermes demonstrates strong operational efficiency. For deeper insights into Alkermes’ financial health and growth potential, including 8 additional ProTips, check out the comprehensive research available on InvestingPro.
The firm highlighted that ALKS2680 appears to be a more potent drug with superior once-daily dosing compared to competitor Takeda’s TAK-861. However, Stifel acknowledged the high bar for clinical differentiation in measures like the Maintenance of Wakefulness Test, cataplexy control, and Clinical Global Impression of Improvement.
Alkermes is developing ALKS2680 as an orexin receptor agonist, a drug class designed to address the underlying pathology of narcolepsy by replacing missing orexin signaling in the brain that regulates wakefulness.
In other recent news, Alkermes has been in the spotlight following its first-quarter earnings report for 2025, which exceeded expectations in both revenue and earnings per share. The company has maintained its full-year guidance, providing a stable foundation for its valuation. UBS has upgraded Alkermes from Neutral to Buy, raising its price target to $42.00, driven by confidence in the company’s orexin receptor drug candidate, ALKS-2680. This optimism is shared by Stifel, which also maintains a Buy rating and a $42.00 price target, highlighting the potential of ALKS-2680 in upcoming clinical trials.
Meanwhile, Cantor Fitzgerald reaffirmed its Overweight rating with a $43.00 price target, focusing on the significance of Alkermes’ Phase 2 trial results for ALKS-2680 in treating narcolepsy and idiopathic hypersomnia. RBC Capital, however, maintains a Sector Perform rating with a $40.00 price target, expressing caution regarding the safety profile of orexin receptor agonists. The analysts at RBC identified potential concerns, including stimulant-like effects and other safety risks, that could impact Alkermes’ future developments.
The upcoming Phase 2 trials for ALKS-2680 are pivotal, with results expected to validate the drug’s therapeutic benefits and competitive edge. With several analyst firms closely monitoring Alkermes’ progress, the market eagerly anticipates the outcomes of these trials and their potential impact on the company’s growth prospects.
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