ALKS - Alkermes: Waking Up Narcolepsy Treatment With Promising Trial Data

2024-04-09 16:29:10 ET

Summary

• Alkermes reports positive Phase 1 results for ALKS-2680 in narcolepsy and idiopathic hypersomnia, with significant efficacy and manageable side effects.
• The company plans to proceed with a Phase 2 study for ALKS-2680 in Narcolepsy Type 2 later this year.
• Q4 earnings show robust revenue growth, led by Lybalvi, which significantly outpaced other products with 61% year-over-year growth.
• Financially healthy, Alkermes has a strong balance sheet, positive cash flow, and anticipates growth in revenue and net income for 2024.
• I am maintaining my "Buy" rating based on Q4 earnings, ALKS-2680's potential in a growing narcolepsy market, despite risks from generic competition and market sentiment.

Alkermes Shows Strong Phase 1 Results for Narcolepsy Treatment ALKS-2680

Alkermes plc ( ALKS ) stock hasn't moved much since my last update in November. Back then, I discussed its prospects in narcolepsy ahead of Phase 1 data for its orexin 2 receptor (OX2R) agonist, ALKS-2680. I highlighted the potential for this asset to be differentiated in that it addresses a cause of narcolepsy, rather than simply treating a symptom. I also discussed some historical downfalls of OX2R agonists, namely hepatic injury (TAK-994). Furthermore, I expressed optimism for Lybalvi, Alkermes' FDA-approved schizophrenia/bipolar drug that mitigates weight gain that is often a result of antipsychotic treatment. My final recommendation was "Buy."...

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