Street Calls of the Week
Investing.com - RBC Capital upgraded Alkermes (NASDAQ:ALKS) from Sector Perform to Outperform and raised its price target to $44.00 from $42.00. The upgrade comes as analyst targets range from $30 to $54, with InvestingPro data showing the company maintains a strong financial health score of "GREAT."
The upgrade follows RBC’s analysis of potential treatment effects for alixorexton, Alkermes’ drug candidate for narcolepsy type 2 (NT2). RBC believes the drug is likely to show clinically meaningful benefits with a generally tolerable safety profile. With a P/E ratio of 13 and strong cash position, the company appears well-positioned to advance its drug development programs.
RBC analyst Leonid Timashev identified a buying opportunity ahead of upcoming NT2 data, noting that market sentiment remains bearish following previous narcolepsy type 1 (NT1) data results. The recent sell-off in Alkermes shares has created what the firm sees as an attractive entry point. InvestingPro analysis suggests the stock is currently undervalued, with multiple positive indicators available to subscribers.
The price target increase reflects RBC’s higher probability of success for the NT2 indication and model updates. Despite acknowledging potential challenges in the company’s base business, RBC believes the current share price undervalues even modest success in the narcolepsy market.
While recognizing that Alkermes’ future is largely dependent on orexin program success, which adds risk, RBC maintains that the company’s shares are currently undervalued based on the potential in the narcolepsy treatment space.
In other recent news, Alkermes reported impressive financial results for the second quarter of 2025, exceeding analysts’ forecasts with earnings per share of $0.52, compared to the projected $0.36. The company’s revenue also surpassed expectations, reaching $390.7 million against the anticipated $347.16 million. Additionally, Alkermes announced positive phase 2 results for its investigational narcolepsy treatment, alixorexton, which showed significant improvements in wakefulness and cognition in patients with narcolepsy type 1. The drug met its primary endpoint in the six-week Vibrance-1 study, involving 92 patients.
In terms of leadership changes, Alkermes appointed Joshua Reed as its new Chief Financial Officer, effective September 15, 2025. Reed brings over 30 years of financial leadership experience, having previously served as CFO at Omega Therapeutics and Aldeyra Therapeutics. On the analyst front, Stifel maintained its Buy rating on Alkermes, citing the compelling efficacy profile of alixorexton in narcolepsy type 1. Meanwhile, H.C. Wainwright reiterated a Neutral rating with a price target of $46.00 following the company’s presentation of detailed Phase 2 data from the Vibrance-1 study.
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