AVDL - Alkermes: Slimmed-Down Pharma Not A Compelling Growth Story Yet

2024-01-26 14:15:33 ET

Summary

• Alkermes plc, a neuroscience company, has undergone restructuring and simplification, including spinning out its oncology business and selling its manufacturing facility.
• Despite a turbulent year, Alkermes' stock price remains relatively stable, but the company has not recorded a net profit in recent years.
• Alkermes' product portfolio includes Vivitrol, Aristada, and Lybalvi, with positive revenue growth, but the company will need to diversify to offset declining sales of Vivitrol.
• A narcolepsy drug candidate intrigues, given its "blockbuster" revenue potential, although Avadel Pharma's recent approval for Lumryz clouds the outlook.
• All things considered, while Alkermes has solved some major problems in 2023, I would assign the company a "Hold" recommendation in 2024 due to a lack of compelling growth catalysts.

Investment Overview

Having completed the spin-out of its oncology business into a new entity, Mural Oncology plc ( MURA ), which began trading on the Nasdaq exchange last November, Alkermes plc ( ALKS ) now describes itself as:

a pure-play, profitable neuroscience company that will continue its work to develop innovative medicines for people living with difficult-to-treat psychiatric and neurological disorders

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