Figma Shares Indicated To Open $105/$110
On Tuesday, Deutsche Bank (ETR:DBKGn) initiated coverage on Alkermes (NASDAQ:ALKS) shares with a Buy rating and a price target of $40.00. The firm’s analysts highlighted the company’s promising drug, ALKS 2680, which is currently in development for narcolepsy and idiopathic hypersomnia (IH). This drug is seen as a potential best-in-class orexin receptor 2 (OXR2) agonist and is expected to achieve peak sales of approximately $2 billion in the United States if it proves successful. According to InvestingPro data, Alkermes, currently valued at $5 billion, maintains strong financial health with an impressive 83% gross profit margin and trades near its 52-week high of $32.88.
The analysts pointed to recent Phase 1b data for ALKS 2680 in narcolepsy types 1 and 2 and IH as encouraging and suggested that the upcoming Phase 2 readouts in the second half of 2025 could be a catalyst for investors to purchase the stock. They noted that positive results could lead to a significant rise in the stock’s value, especially if the data demonstrates strong performance in comparison to competitors such as Takeda and Centessa. InvestingPro analysis suggests the stock is slightly undervalued at current levels, with additional ProTips indicating strong financial fundamentals and efficient cash flow management.
Despite acknowledging the risks associated with the clinical development of a single asset, which was exemplified by the failure of ALKS 5461 in a Phase 3 trial for major depressive disorder (MDD) in 2016, Deutsche Bank analysts believe that the downside risk is limited. They argue that this is due to Alkermes’ existing commercial portfolio of drugs, which currently generates approximately $1.5 billion in annual revenue. The portfolio is expected to continue growing at a low-to-mid-single-digit rate into the 2030s, providing a buffer against potential clinical setbacks. Supporting this view, InvestingPro data shows the company maintains a healthy current ratio of 3.45, indicating strong liquidity to fund ongoing operations and development programs.
The coverage initiation by Deutsche Bank reflects optimism about Alkermes’ future prospects based on their current pipeline and steady revenue from their commercial drug portfolio. The $40.00 price target suggests a positive outlook for the stock, contingent on the successful progression and eventual approval of ALKS 2680 for the treatment of narcolepsy and IH. For deeper insights into Alkermes’ financial health and growth potential, investors can access comprehensive analysis and additional ProTips through the detailed Pro Research Report available on InvestingPro.
In other recent news, Alkermes is garnering attention from multiple fronts. The biopharmaceutical company has been reaffirmed by Jefferies with a Buy rating and a price target of $41. This endorsement came after a scientific study related to TAK-994’s liver toxicity, suggesting that the liver toxicity does not significantly extend to ALKS-2680, another compound in development by Alkermes. TD Cowen, another analyst firm, also mentioned Alkermes in its list of key 2025 biotech catalysts, anticipating the release of Phase II datasets for its orexin candidate ’2680 in the first half of 2025.
Piper Sandler, a well-known investment firm, maintained an Overweight rating on Alkermes with a $37.00 price target. The firm highlighted Alkermes’ concentrated efforts on advancing a comprehensive development program for their oral orexin 2 receptor (OX2R) agonist product candidates, particularly ALKS-2680.
In addition to these developments, Alkermes has announced the prepayment and termination of a significant credit agreement for its subsidiary, Alkermes, Inc. This financial move resulted in the release of all liens on the collateral that secured the obligations under the credit agreement. These are recent developments that investors in Alkermes may find noteworthy.
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