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Investing.com - RBC Capital has raised its price target on Alkermes (NASDAQ:ALKS), a $5.1 billion market cap biopharmaceutical company, to $47.00 from $45.00 while maintaining an Outperform rating on the stock. Currently trading at $31.17, InvestingPro analysis suggests the stock is undervalued, with strong financial health metrics supporting potential upside.
The price target increase follows Alkermes’ announcement of its intention to acquire Avadel Pharmaceuticals (AVDL). RBC Capital notes the acquisition "checks multiple boxes" for Alkermes, including supporting a key future growth driver with a commercial base of operations. InvestingPro data reveals the company is well-positioned for this move, holding more cash than debt on its balance sheet and maintaining a healthy current ratio of 3.23.
The firm believes the acquisition brings in near-term revenues without stretching Alkermes’ balance sheet, and should strengthen both the near-term and mid-term outlook for the company.
RBC Capital continues to view the setup into VIBRANCE-2 trial positively, seeing potential for high efficacy and good tolerability for Alkermes’ pipeline candidate.
The firm recommends buying Alkermes shares at current levels, citing the company’s well-performing base business and the addition of a new growth driver through the Avadel acquisition.
In other recent news, Alkermes plc announced a significant acquisition of Avadel Pharmaceuticals plc for up to $2.1 billion. The deal involves a cash payment of $18.50 per share, with a potential additional payment of $1.50 per share if Avadel’s LUMRYZ receives FDA approval by the end of 2028. This acquisition, which adds the FDA-approved LUMRYZ to Alkermes’ portfolio, represents a 38% premium to Avadel’s three-month weighted average share price. In another development, Alkermes reported total revenues of $390.7 million for the second quarter of 2025, with proprietary product net sales increasing by 14% year-over-year to $307.2 million. The company expressed optimism about meeting its financial expectations for the year, fueled by strong proprietary sales and progress in its narcolepsy treatment pipeline. UBS also raised its price target for Alkermes from $42 to $46, maintaining a Buy rating, reflecting an increased enterprise value-to-2030 estimated sales multiple. These recent developments highlight Alkermes’ strategic growth initiatives and financial performance.
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