Alkermes Hold Rating: Balancing Promising NT1 Study Results with Competitive and Valuation Challenges

In a report released today, Douglas Tsao from H.C. Wainwright maintained a Hold rating on Alkermes, with a price target of $46.00.

Douglas Tsao has given his Hold rating due to a combination of factors. The positive topline data from the Vibrance-1 Phase 2 study in narcolepsy type 1 (NT1) is a significant milestone for Alkermes, as alixorexton met both primary and secondary endpoints, showing improvements in wakefulness, fatigue, and cognition. However, despite these promising results, the competitive landscape in the orexin-2 receptor (OX2R) space remains intense, with competitors like Takada also reporting positive data in similar studies.
While alixorexton’s ability to improve fatigue and cognition could differentiate it from competitors, the full dataset is still awaited to confirm these findings. Additionally, the valuation and risks associated with Alkermes, including clinical development, regulatory approval, and commercial execution, contribute to the Hold rating. The price target of $46 is based on a 7.4x multiple of the 2035 risk-adjusted revenue estimate, reflecting a balanced view of potential success and inherent risks.

In another report released on July 17, J.P. Morgan also maintained a Hold rating on the stock with a $34.00 price target.