Stifel maintains Alkermes stock Buy rating, $42 target

On Wednesday, Stifel analysts maintained a positive outlook on Alkermes (NASDAQ:ALKS) shares, reiterating a Buy rating and a $42.00 price target. According to InvestingPro data, analyst targets for Alkermes range from $30 to $52, with the stock currently trading at $30.88. The company’s market capitalization stands at approximately $5 billion, and it has demonstrated strong financial performance with a "GREAT" overall health score. The endorsement follows a meeting with Alkermes CEO Richard Pops during Stifel’s Boston Biotech Bus Tour. The conversation primarily centered on the company’s orexin program, which is approaching significant milestones with phase 2 data expected in July for Narcolepsy Type 1 (NT1) and in the fall for Narcolepsy Type 2 (NT2). InvestingPro analysis reveals the company maintains a strong balance sheet with more cash than debt and impressive liquidity metrics, providing ample resources to support its clinical programs.

The analysts expressed confidence in the NT1 trial’s success, drawing parallels to the positive results of a similar compound, TAK-861, suggesting that the efficacy of Alkermes’ treatment is more certain. However, the NT2 trial poses more uncertainty, particularly concerning safety. Despite these concerns, Stifel’s analysts are optimistic that Alkermes can administer the drug in a way that minimizes side effects, a sentiment echoed by key opinion leaders (KOLs) who appear less worried about these potential issues.

A successful outcome from the NT2 trial could be a major victory for Alkermes, as it would validate the treatment for Idiopathic Hypersomnia (IH) and potentially other central nervous system (CNS) indications. Furthermore, the analysts touched upon the topic of Most Favored Nation (MFN) drug pricing. While recognizing the complexities and uncertainties surrounding MFN, they noted that Alkermes’ management provided insights on the evolution of MFN over the past week and explained why the company is in a favorable position.

The reaffirmation of the Buy rating and price target by Stifel signifies continued support for Alkermes’ stock, as the company anticipates key developments in its pipeline. The analysts’ meeting with the CEO offered them a closer look at the strategic moves Alkermes is making and the potential impact of upcoming clinical trial results on the company’s valuation. The company has demonstrated strong profitability with an impressive 84% gross margin and robust cash flows. For deeper insights into Alkermes’ financial health and detailed valuation metrics, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence.

In other recent news, Alkermes has reported strong first-quarter earnings for 2025, surpassing expectations in both revenue and earnings per share, and reaffirming its full-year guidance. Stifel analysts have maintained their Buy rating with a $42 price target, highlighting the company’s solid financial foundation and the potential of its orexin receptor agonist, ALKS 2680, which is expected to have significant data releases from two phase 2 studies later this year. RBC Capital Markets has initiated coverage with a Sector Perform rating and a $40 price target, acknowledging the growth potential of Alkermes’ next-generation orexin antagonist for treating narcolepsy, despite a competitive market.

Cantor Fitzgerald has reaffirmed an Overweight rating with a $43 price target, focusing on the upcoming Phase 2 trial results for ALKS 2680, which could validate the drug’s potential in treating narcolepsy and idiopathic hypersomnia. TD Cowen has also maintained a Buy rating with a $27 price target, expressing optimism about Alkermes’ competitive position in the sleep disorder market and the potential expansion of this market with new treatments. In a significant company development, Alkermes announced the passing of its Chief Financial Officer, Iain M. Brown, who had been on medical leave since February 2024. Blair C. Jackson and Samuel J. Parisi continue to serve in interim financial roles as the company searches for a new CFO.

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