Cantor Fitzgerald maintains $43 target on Alkermes stock

On Monday, Cantor Fitzgerald reaffirmed its Overweight rating on Alkermes (NASDAQ:ALKS), currently trading at $30.13 with a market cap of $4.97 billion, maintaining a stable $43.00 price target. According to InvestingPro data, the company maintains a "GREAT" financial health score, positioning it well for upcoming catalysts. The firm’s analyst spotlighted the upcoming Phase 2 trial results for the company’s ALKS 2680, an oral orexin 2 agonist, as a critical point for validating the drug’s potential and competitive edge in treating narcolepsy types 1 and 2, as well as idiopathic hypersomnia.

The analyst emphasized the significance of the forthcoming data from the Vibrance-1 and Vibrance-2 trials, expected early in the third quarter of 2025 and in the fall of 2025, respectively. These trials could confirm ALKS 2680’s therapeutic benefits, leveraging its selectivity, potency, and safety profile to meet the unmet needs in both orexin-deficient and non-orexin pathophysiology populations. InvestingPro analysis shows analyst targets ranging from $30 to $52, with a consensus recommendation leaning towards Buy, suggesting strong market confidence in the company’s pipeline potential.

While acknowledging that Takeda’s TAK-861 currently leads the class with its Phase 3 program ongoing for narcolepsy type 1, the analyst noted that ALKS 2680’s broader development scope and supportive Phase 1b data suggest it is well-positioned in the market. The Phase 2 trials aim to replicate improvements in the Measurement of Wakefulness Test (MWT) from baseline, seen in the Phase 1b study. Specifically, the analyst looks forward to a mean sleep latency of approximately 30 minutes in Vibrance-1 (with the 8mg dose) and over 25 minutes in Vibrance-2 (18mg).

Safety is a key concern, as common adverse effects include visual disturbances, and in extreme cases, hepatotoxicity, as seen with Takeda’s TAK-994. However, the analyst pointed out that ALKS 2680’s Phase 1b trial revealed no severe adverse events, with the most common being mild insomnia and pollakiuria, suggesting a tolerable profile for the patient population that often requires multiple medications. The analyst’s comments come as Alkermes continues to develop its pipeline, with the market closely watching for the upcoming trial results. InvestingPro data reveals the company’s strong financial foundation, with more cash than debt on its balance sheet and a robust current ratio of 3.33, providing ample resources for continued pipeline development. The company has maintained profitability over the last twelve months, with an impressive gross profit margin of 84.4%.

In other recent news, Alkermes has reported strong financial results, exceeding expectations in both revenue and earnings per share for the first quarter of 2025. The company reaffirmed its full-year guidance, contributing to a positive outlook from analysts like Stifel, who maintain a Buy rating with a $42 price target. RBC Capital Markets also initiated coverage with a Sector Perform rating and a $40 price target, citing growth potential from Alkermes’ orexin antagonist for narcolepsy treatments. Meanwhile, Goldman Sachs raised its price target from $30 to $32, continuing to recommend a Buy rating, reflecting confidence in Alkermes’ strategic execution and promising pipeline.

Analyst Joseph Thome from TD Cowen maintains a Buy rating with a $27 price target, highlighting the potential of the narcolepsy and idiopathic hypersomnia markets, which could expand significantly with new treatments. The company’s investigational drug, ALKS 2680, is attracting attention for its potential in treating sleep disorders, with Phase 2 data expected later this year. Despite these positive developments, Alkermes is navigating challenges, including the recent passing of its CFO, Iain M. Brown, who had a significant impact during his 22-year tenure. Interim officers Blair C. Jackson and Samuel J. Parisi are currently managing financial duties as the company searches for a new CFO.

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